Sales tax back on the ballot

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On Nov. 6, voters will decide if improving county roads is worth a sales tax increase.

A resolution to increase the local option sales tax rate from 2.25 percent to 2.75 percent will be on the ballot again.

The commission’s intention for the referendum is to generate more money to increase the highway department’s budget, so it can pave more roads.

“We hear almost every month, complaints about the condition of the roads,” commissioner David Adkins said.

The Campbell County Commission passed the 2012-13 budget without increasing the property tax rate. In order to accomplish this, certain departmental requests were eliminated before the budget was approved. This included a request for a $1 million increase to the highway department’s budget.

“Every year, I tell the county commission what I need to do my job,” road superintendent Dennis Potter said. “My job is to let the county commission know what I need. There’s $88 million of revenue, whether they make cuts or whether they choose to raise taxes, that’s their decision. All I know is, I need more money to pave roads with.”

Prices for asphalt and fuel have increased over the years, but Potter’s budget has remained the same, he said. In the highway department, 11 positions have been eliminated through attrition, and, except for paving, services haven’t been cut, Potter said.

“Paving’s where we’re hurting,” Potter said. “We are currently paving 10 miles of road a year, with 700 miles of road, which is not enough. I don’t want to see our roads deteriorate. I want to see them get better, or at least maintained.”

At the Aug. 20 meeting, commissioner Marie Ayers made a motion to put a half percent sales tax increase on the November ballot. The commission approved the motion.

Commissioner Tom Hatmaker voted against it.

“I’m not for another tax increase,” Hatmaker said. “But if I was for one, it would be this one. It is the fairest thing we can do to try to generate some extra revenue for the county.”

Hatmaker feels Potter runs the tightest department in the county. He feels confident the money would go to blacktopping.

“That’s the reason I’d be willing to give him more money,” Hatmaker said. “The only reason I would even be for this, is it actually will go to the road department to pave more roads.”

Adkins believes a sales tax is the fairest tax.

“Nobody wants to pay any more taxes; I don’t want to pay any new taxes,” Adkins said. “This, in my mind, is the best option to get roads improved. It’s better to let everybody share a piece of the pie and get our roads improved than to stick it on one class or the other, whether it’s (a) property tax or wheel tax.”

Adkins pointed out how tourists also pay sales tax.

“We have a great opportunity to let some of the people that’s coming through here to carry some of the burden so we can get our roads fixed,” he said.

Campbell County residents already shop in surrounding counties with a 2.75 percent tax rate, such as Anderson County, Adkins said.

“There’s a lot of counties across the state that’s at 2.75 percent,” he said.

There are also municipalities within counties that have a 2.25 percent tax rate that have a 2.75 percent tax rate. The portion of Lake City that lies in Campbell County has a 2.75 percent tax rate.

“They’re already paying this,” Adkins said.

Should voters give the resolution the nod, the increased rate would generate about $1,567,000 in revenue, Campbell County Director of Finance Jeff Marlow estimated. However, The majority of this money, $1.37 million, would come from within municipal boundaries. Half of this money, $685,000, would be allocated to the school system, and the other half would go to the applicable municipalities, Marlow said. Only $197,000 of this money would be generated outside municipal boundaries. Half, $98,000, would go to the school system, with only the remaining half being able to go to improving roads.

While state law restricts the commission from putting a sales tax increase on the ballot that can generate revenue that will serve its intended purpose, the commission was able to redirect funds from elsewhere to effectively fund improving roads. At its Sept. 17 meeting, the commission passed a resolution to redirect 50 percent of the wheel tax to improving the roads should the resolution to increase the sales tax pass. This resolution will only be effective if the sales tax increase passes. Currently, 100 percent of the wheel tax is allocated to the school system. If the sales tax increase passes, it would redirect $783,000 of wheel tax revenue from the school system to improving the roads. The school system wouldn’t lose any revenue, because state law mandates it receive $783,000 of the money generated from the sales tax increase. With allocations from sales taxes and the wheel tax, the highway department would receive $881,000 if the sales tax increase passes.

“It’ll pave about eight more miles of road a year,” Potter said. “We need to pave 30 miles a year. But it’s a step in the right direction. We can’t continue to pave 10 miles a year.”

The same referendum went before the voters in March and was defeated by a two to one margin.

“I’m not in favor of more taxes,” Campbell County resident Joe Smith said. “I probably will vote for it if it’s properly worded. We have to be careful how we let them word it.”

Smith has three main concerns about the sales tax increase.

As a property owner, Smith is concerned property taxes will increase if the resolution fails.

“There needs to be some measure taken where they can’t raise property taxes if this fails,” Smith said.

Smith also expressed concerns about the money not being handled properly.

“There needs to be something in there where this money goes to what it’s intended for, and cannot be used for any other purpose,” Smith said.

“If I get it (the money), every penny will go to asphalt,” Potter said. “My job is to use what they give me.”

Smith also feels the tax increase shouldn’t be a permanent solution, but limited to a few years. He believes the commission should revisit the issue.