Nobody likes a tax increase, but this March, four county boards of commissioners are trying to sell one to voters.
County commissioners in Gates, Granville, Hyde and Wayne counties voted to put a quarter-percent sales tax increase on the primary election ballot. If a majority of voters approve these ballot referendums, their counties’ sales tax rates will rise from 6.75% to 7%. Commissioners would have discretion on how to spend the proceeds.
In Gates County Commissioner Emily Truman’s eyes, the tax hike isn’t a want; it’s a need.
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Gates County has many food-insecure students, she said. Since the launch of a free school breakfast and lunch program, the county has seen an uptick in performance and a decline in behavioral issues. That’s no coincidence, Truman said.
However, the county can no longer foot the bill every year, due to its small tax base. That’s why they’re asking the voters for help.
Truman doesn’t expect an easy journey.
“These referendums don’t typically pass on the first time, so we’re optimistic, but also we understand that it may take several attempts before we do get it to pass,” she said. “We’re hopeful, but we’re also aware that it’s not likely.”
Tax increase on Gates County ballot
That reservation is based on some sound reasoning from the state’s recent history.
Since the state legislature passed a law allowing counties to ask voters for an additional quarter-percent (0.25%) sales tax in 2007, just over a quarter of the resulting ballot referendums have succeeded.
In some cases, county commissioners put the tax on the ballot over and over again, only to be repeatedly rebuffed by voters. For example, in the 2024 election, 10 counties put the quarter-percent sales tax on the ballot. Only Washington County’s voters approved the measure.
The sales tax increase would apply to all purchases except prescriptions, gas and groceries. Both residents and non-residents are subject to the tax. For example, if someone made a $100 purchase in a county with the tax hike, they would pay an additional 25 cents. If they made a $10,000 purchase, they would have to cough up an extra $25.
So far, 49 of North Carolina’s counties have approved the quarter-percent sales tax increase.
Gates County commissioners, though, have never put the question to the voters. Until now.
If the referendum succeeds, the revenue would first go to fund the school meal program, which costs about $130,000 annually, Truman said. Any additional money would go to the county food pantry and other community food pantries, she added.
Truman expects to raise about $200,000 if the referendum is approved. The community reaction is mixed, she said. While families of kids in the school system tend to be excited about the referendum, a few business owners have offered negative feedback.
“Not many, but a couple of them are saying, ‘Oh, well, we’re so close to Virginia. What if raising our tax by a quarter cent sends people to Virginia?’” she said. “Our tax base is still so much lower than Virginia that I don’t see that being a concern.”
For fellow commissioner Dave Forsythe, Virginia isn’t the problem. Neither is the cause. It’s the timing of this tax increase ask, he said.
In the last budget cycle, the Gates County Board of Education asked the county commissioners for way more than usual, he said. It raised some eyebrows about the board’s spending habits.
In December, the board requested that the state auditor look into the education board’s spending habits.
A few months before, Forsythe was the only board member to vote against putting the sales tax referendum on the ballot.
“I felt like it was inappropriate to ask the taxpayers to potentially come forward with more money when we’re not even sure how much (the school board is) spending, or their processes and procedures for using the money,” he said.
Besides, the revenue the sales tax would generate would be good, but wouldn’t solve the school system’s problems on its own, Forsythe said. If the referendum passes, he will still be happy, he said. But he isn’t expecting it.
“A lot of people are just noncommittal these days, and in a primary election for a referendum that they don’t fully understand? A lot of people just don’t know,” he said. “It really will come down to if enough people just show up, especially teachers.”
Granville, Hyde and Wayne counties
Granville County’s been missing out, county commissioner Zelodis Jay said. The additional sales tax revenue would be a “good help” to the county, which also has a small tax base.
It also has a growing population. That concerns Jay. More people means a greater need for emergency services and law enforcement, and the county doesn’t have the money to pay for it. At least not yet.
Jay hopes that voters will come around to the idea. He gets a lot of questions about the tax increase, but when he explains the need and the actual cost to taxpayers, people seem to get on board, he said.
According to the county website, the tax would produce an estimated $1.6 million annually for Granville County. In addition to emergency services, the money would partially go to public and charter schools, including for teacher raises.
If it doesn’t pass this time around, Jay said the county commissioners will probably bring the referendum back next election cycle.
“It’s really something we need,” Jay said.
Wayne County commissioners also voted 6-1 to put a sales tax increase on the ballot. If it’s approved, the estimated $3.41 million in revenue would fund additional school resource officers in the county’s public schools and various school capital projects, according to meeting minutes.
Hyde County has the second smallest budget in the state, at less than $20 million, county commissioner Randal Mathews said.
It’s a Tier 1 county — meaning it is categorized as economically distressed. Plus, the coastal and island county has a vulnerability to natural disasters like floods and hurricanes.
Mathews doesn’t like raising his own taxes, but they’ve got a serious revenue problem, he said. The county’s area is large, which requires extensive resources for emergency management and law enforcement to do their jobs effectively.
To make matters worse, federal cuts to SNAP combined with the state legislature’s budget stalemate have put the county in a tough spot.
“When the state or the federal government stops subsidizing or funding certain programs in a poor county like Hyde, we really feel it,” Mathews said. “We don’t have a $200 million budget to shuffle money around.”
The tax, if approved, won’t be a panacea. But over time, the cumulative revenue will provide some relief, Mathews said.
Voters may not think it’s worth it. They certainly didn’t in 2024, when 76% of voters rejected the county’s first attempt at a quarter-percent sales tax increase. Mathews doesn’t think the county did a good job of explaining it.
This time, he plans to use social media to talk about it, among other strategies.
“We’re going to get pretty creative about how we sell the idea,” he said.
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