It’s not been easy in the past month or so keeping up with what’s happening in Raleigh and Manteo and how various proposed bills, motions, and resolutions might affect what you pay in taxes.
For instance, consider the issue of sales tax. We’ve had a lot of headlines in The Island Free Press lately with the words “sales tax” in them. And they refer to two separate and unrelated issues.
First, there is the issue of Dare County’s sales tax, which will probably increase by 1/4 cent before the end of the year.
Then, there is the issue of a bill introduced in the General Assembly by Onslow County Republican Harry Brown that would totally change the way that sales tax monies are distributed to the counties. If that happens, Dare County would have to increase property taxes by 9 cents or more just to stay even.
So if you’ve been confused when you’ve seen stories about the sales tax, that’s understandable.
If you live on Hatteras Island, you can worry even more about paying increased property taxes, since at least three of the seven county commissioners have said publicly that, as a matter of fairness, they think Hatteras islanders should contribute to a planned beach nourishment project in Buxton to protect Highway 12 from the ocean.
Add that to the fact that last month Dare County Board of Commissioners committed to finding about $3.8 million in its general fund budget of about $100 million to dredge Oregon and Hatteras inlets and you will hang onto your purse strings even more tightly. The choices are to cut services, which the board is finding out isn’t as easy as it might seem, or increase taxes, which it does not want to do — and probably won’t.
Finally, until this week, those who opposed using Dare County’s 6-cent occupancy tax to pay for dredging Oregon Inlet were waiting to see what would happen with a bill introduced by Sen. Bill Cook, who represents Dare. That bill would allow commissioners to use any part of the occupancy tax funds for inlet dredging. That’s money that is now shared with the towns to increase their budgets to provide services and infrastructure for tourism, for promotion of tourism, and for beach nourishment.
To help you keep track, here are short updates on each of these issues.
Sales Tax Increase
This will probably happen. Last Friday, the commissioners asked the General Assembly to approve a 1/4-cent increase — 25 cents on each $100 spent — and to earmark the money to pay for inlet dredging.
Rep. Paul Tine, who represents Dare County, introduced a bill in the House to do that on Monday. It was amended on Tuesday, and rewritten and passed in the House on Wednesday.
It is now in the Senate, where it is expected to pass easily and probably quickly when the legislators return from a week-long Easter break.
After that, the Board of Commissioners must give 10 days notice of a public meeting and then pass a resolution implementing the tax increase and raising Dare’s sales tax from 6.75 percent to 7 percent.
The money is expecting to raise about $3.3 million a year for inlet maintenance projects.
Sales Tax Distribution
This bill would change the way sales tax money is portioned out to the counties.
Right now, the money is distributed based 75 percent on point of sale and 25 percent on county population, adjusted by a formula to assist counties with small year-round populations and a large tourist influx in the summer that requires more county services.
The bill, Senate Bill 369, would change that to a system of distribution based solely on population — with no adjustment or allowance for counties with a tourism-based economy. Brown says that he is proposing this to help poor, rural counties that are being shortchanged by a system that gives more sales taxes to urban centers with shopping malls and big-box stores.
Because of its smaller year-round population, Dare County is the biggest loser in the state in this deal. The county would lose almost 60 percent of its sales tax revenues. The current estimate is that the county budget would take a $12 million dollar hit and incorporated towns would also lose revenues on top of that.
If this bill becomes law as it is written, the commissioners would have to raise property taxes about 9 or 10 cents just to bring in the same revenue as it did before — or just cut and slash the budget to a degree that we would be living in a county we didn’t even recognize.
Towns that will also lose sales tax revenue will have to increase their property taxes. So residents in towns would be paying higher county and town taxes. Manteo and Kill Devil Hills taxpayers, for instance, would see their property taxes increase by about 14 cents per $100 of property valuation.
This bill is a disaster on any number of levels and is getting resistance from big counties that are also big losers, such as Wake and Mecklenburg. Gov. Pat McCrory has said he does not support it and Sen. Bill Cook has said he does not support it in its current form.
There is talk about making changes to the bill, but any bill that takes sales tax revenue from Dare will be problematic for balancing the budget.
Beach Nourishment
The towns north of Oregon Inlet that have either gotten their beaches nourished with more sand or plan to do it soon are taxing property owners to raise some of the funding.
Dare County is planning a beach restoration project in north Buxton that includes a handful of private properties but would mostly put sand onto Park Service beaches and is designed to protect Highway 12.
However, the Board of Commissioners will be deciding during its budget planning for the next fiscal year whether some or all of Hatteras islanders should have to contribute to the Buxton project.
At a February retreat, three commissioners said they were in favor of property owners footing part of the bill.
This issue will have to be decided this spring for the next budget year, which begins July 1.
At its first budget planning workshop, the board did not address the issue — but it will have to in the coming weeks.
A 1 cent increase per $100 of valuation for Hatteras Island property translates to about $219,000. The project is expected to cost about $25 million.
Stay tuned, and now is the time to make your wishes known to the board members.
Funding for Inlet Dredging
The commissioners committed at their March 2 meeting to find about $3.8 million in the county budget to fund inlet dredging — rather than use the occupancy tax.
Though they have met in one budget workshop, they are starting to find out that it’s not easy to cut the budget. Many of the possibilities that the county manager put on the table weren’t popular with various board members. These included cutting funds for mosquito control, closing the rubble site in Buxton, raising fees for Parks and Recreation programs, cutting funding for mental health care.
Each program and expenditure has its constituency.
There will be several more workshops and there are other ways on the table to fund the inlet dredging, so stay tuned for this one also.
And I might mention that it would be appropriate for constituents to let their elected commissioners know what they think could go in the budget and what should not.
Occupancy Tax Funds
Senate Bill 160, introduced by Sen. Bill Cook, is mostly about providing for the dredging and maintenance of the state’s waterways — shallow draft inlets and deeper channels and ports.
However, Sen. Cook added a section to the bill that would allow the Board of Commissions to raid the county’s 6 percent occupancy tax to pay for dredging Oregon Inlet. That money is now earmarked for the county and towns to pay for increased services needed for an increased summer population, tourism promotion, and beach nourishment.
Town and tourism officials, representatives of the Outer Banks Chamber of Commerce and other business groups, supporters of beach restoration, and many ordinary citizens oppose the use of already-committed occupancy funds for dredging.
At a March 2 meeting, the board voted to ask Cook to remove the Dare County section of the bill, which didn’t happen before it was introduced and sent to committee and it didn’t happen in the following weeks.
But it has happened now.
A new version of HB 160 was unveiled in committee this week. The Dare County section has been removed.
And $4 million has been included for dredging Oregon Inlet.
Related blogs for more information
Click here to read the March 13, 2015 blog — The first 90 days of new leadership
Click here to read the March 27, 2015 blog — The pressure is on the Dare County commissioners
HATTERAS VILLAGE PASSES ON OCEANFRONT PROPERTY — FOR NOW
The Hatteras Village Tax District Board of Trustees voted last week to not pursue the purchase of several parcels of property, including some on the oceanfront.
The vote was 3-2 with trustees Ernie Foster, Rom Whitaker, and Ricki Shepherd voting against and Richie Midgett and Geraldine Farrow voting in favor.
The property is being offered to the tax district for $1.2 million by Eric Kaplan, owner of the non-profit Hatteras Island Ocean Center.
Supporters of the purchase think the property could be developed into an economic engine for the village — a beach access with a bathhouse, picnic tables, a public beach and perhaps later an oceanfront event venue. It’s an opportunity, they think, that the village can’t pass up.
Others think the property is unaffordable and that the whole project has had little or no planning.
Advocates say that with the possibility of about $600,000 in grants, the property is affordable and that it should be seriously considered.
The tax trustees have been considering the purchase since late last summer and have pitched the idea to the Hatteras Village Civic Association. Though only the trustees can approve expenditures from the special district tax of 8.21 cents per $100 valuation, the trustees rely on the Civic Association to manage the property it purchases, such as the village’s Civic Center.
HVCA’s board has not been receptive and has voted several times against the purchase. However, the tax trustees had not voted until last week.
Midgett, president of the tax trustees, said this week that he is disappointed but will continue to pursue the idea of purchasing some kind of oceanfront property for the village. He said he is still pursuing grants and plans a meeting soon with Dare County manager Bobby Outten to discuss options for the community.
Related blogs on the Hatteras village oceanfront property
Click here to read the Nov. 14, 2014 blog — An opportunity for Hatteras village.
Click here to read the Nov. 28, 2014 blog: –Tying up loose ends: Updates from Hatteras Island villages
RADIO HATTERAS NEEDS OUR SUPPORT
Radio Hatteras, the island’s non-profit, community station, celebrated its first anniversary on March 14 and launched a membership drive.
The station, which has been mostly supported by Dare County and grants, needs member support to go forward — to pay the bills for such things as the telephone, music rights, and insurance.
Becoming a member is very reasonable — $25 for an individual and $50 for a family. You can go to the station’s website, www.radiohatteras.org and use PayPal or mail checks to Radio Hatteras, P.O. Box 339, Frisco, NC 27936.
My guests on last Sunday’s edition of “To the Point,” were the volunteers who have been bringing you this community radio station 24 hours a day, seven days a week, for the past year.
I’ve been working with them since I started this interview show last Labor Day weekend, and I don’t mind telling you how impressed I am with how hard they work, how dedicated they are, and how creative they have been in programming this new station.
They work behind the scenes, and they apparently like it that way. It took some persuading to get them to sit down out front, so to speak, to talk about how the idea of a community radio station moved from a dream of a few Frisco firefighters to a reality with a real brick-and-mortar studio in a county-owned building.
Last Sunday, they will share their stories of how the dream became a reality and what they do to keep the music, news, announcements, and creative programming coming your way.
Click here to listen to the audio of the March 29 edition of “To the Point.”
