To Durham municipal governments, it will be an early Christmas, but shoppers will likely grumble at a possible sales tax increase slated to go into effect Dec. 1.
The General Assembly voted Tuesday to approve a measure allowing counties to raise their portion of the sales tax by a half a cent, with the House giving its final approval and the Senate tentatively affirming the bill. This measure comes in the wake of a new state budget--approved last Friday--that threatened to leave counties without the funding the state normally provides. The bill will permit counties to increase the tax with no additional referendums required.
The measure will let municipalities make up for $333 million that the state withheld this year in reimbursements. Previous legislation would already have allowed local governments to collect an additional half cent in sales tax in July, when the state will cut its sales tax by the same amount. The new bill will let counties start levying the tax seven months earlier, resulting in a temporary increase to 7 percent.
Durham County Commissioner Ellen Reckhow said she expects the county to choose the option of increasing the sales tax.
"I think we'll have to do it because we know that we have bills to pay and a budget to meet," she said.
Under state law, cities and counties must have balanced budgets.
"Our problem is that we have been forced into this situation by the state government," Reckhow said. "They're not doing the responsible thing; they're not raising taxes themselves."
If the Board of County Commissioners votes to levy the tax, revenue will be split between the city and the county.
"We'd be able to put back on the burner some of the projects that we've had to defer, especially maintenance kinds of things and other capital improvements," said City Council member Cora Cole-McFadden.
Though usually opposed to raising taxes, the Durham Chamber of Commerce is not taking a position on the sales tax increase, President Tom White said.
"We totally understand the need to identify other sources of underwriting," he said.
City Council member Lewis Cheek said he thinks the tax increase will help the city, though he would have preferred to try putting alternate fundraising measures on a local referendum. But the state legislature declined to pass a bill permitting such an action.
"Certainly we're glad to get whatever we can," Cheek said.
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