LUMBERTON — A proposal pending in the state Senate that places a cap on the amount of local sales taxes a county can collect would kill plans by Robeson County officials to fund new jail construction by increasing the county’s local sales tax, according to Sen. Michael Walters.
The legislation does, however, allow counties to request additional sales tax increases to fund school and public transportation projects.
The Senate Finance Committee has approved the bill that would cap the local sales and use taxes a county can collect at 2.5 percent of the price of a good or service, meaning that the combined state and local sales taxes would be limited to 7.25 percent, with exceptions for Durham and Orange counties, which are currently at 7.5 percent.
According to Walters, the pending legislation is scheduled to be considered by the full Senate this week. Walters, who represents Robeson and Columbus counties, said he will vote in favor of the bill because it includes provisions for sales tax increases for education and public transportation needs, as well as requiring that any increase be approved by county voters in a referendum.
The combined state and local sales taxes is now 7 percent in Robeson County. The combined tax is 6.75 percent in 73 of North Carolina’s 100 counties, with the rest, such as Robeson, having approved higher rates through various voter referenda in recent years.
Robeson County voters in August 2010 approved a sales tax hike of a quarter of 1 percent that was expected to raise more than $1 million a year. The county Board of Commissioners said at the time the hike was needed in order to avoid a hike in the property tax rate.
Walters said that Robeson County officials could attempt to get a local bill passed in next year’s long session of the General Assembly that would allow a referendum on an increase in the local sales tax to fund a jail to be held.
“You can ask for anything,” he said, “but a request for a referendum to increase taxes for a project such as jail construction is unlikely to make it through the General Assembly.”
Walters and the four members of Robeson County’s state House delegation, all Democrats, had attempted during the current short session of the General Assembly to file a local bill asking the General Assembly to allow Robeson County to hold a referendum allowing local residents to decide if they wanted a 1-cent sales tax increase to pay for construction of a county jail and new school. The Republican leadership in both the Senate and House, however, did not support the bill.
If that had happened, the county’s combined state and county sales taxes would have jumped to 8 percent, the highest in the state.
County Manager Ricky Harris said late last week that Robeson County officials oppose the pending legislation and made known its opposition to the bill to the N.C. Association of County Commissioners, which is lobbying against its passage.
Harris has said on numerous occasions that he is unaware of any alternate means of funding the jail and school construction, projected to cost $84 million, without the $5.5 million a year the 1-cent hike in sales tax would generate for the county. The only other way to fund construction of the jail and school, Harris said, is for the county to increase property taxes. At the current rate of 77 cents for each $100 of property value, Robeson County already has one of the highest property tax rates in North Carolina.
Walters said that from the support the proposed bill had in the Senate Finance Committee that he expects it will be approved by the full Senate.