Defeat of new tax sends a strong message

Published 11:04 am Friday, November 9, 2007

By Staff
Proponents of a land transfer tax knew they had an uphill fight.
They probably didn’t know they were going to get clobbered.
Voters in 16 counties, including Washington County, said “no” to the tax on Tuesday. In Harnett, the margin was 6,458-to-507. In Graham County, it was even worse. In that county, 97 percent of the 1,535 voters said “no.”
By comparison, Washington County’s referendum was almost close. It only failed 1,629-to-651, or 71 percent. That was actually much closer than similar defeats in the early 1990s and again in 2001.
Washington County’s land transfer tax would have allowed the county to charge a 1 percent fee for people selling land. If you never sold your house, you’d never pay the tax. If you gave your house to your children, you’d never pay the tax. The tax is only triggered if the property is sold.
County Manager David Peoples supported the tax, but heard the voters’ message loud and clear. It simply means his job just got harder. He’s trying to attract new industry and jobs that will in turn stem the tide of a population drain that’s started since the 1980s. The tax would have given him $300,000 to help do it, and now the only choice appears to be raising traditional property taxes or watching the slide continue.
The way Peoples views it, the $300,000 a year a land transfer tax would bring could be leveraged to get a $2 million bond passed now. The money could be used to extend utility lines or build an industrial park without increasing property taxes.
To raise the same kind of money, the county would have to increase the tax rate by 4.3 cents. The rate now stands at 79 cents.
Washington County had the option of going for a sales tax increase instead of the land transfer tax, but it couldn’t seek both. The sales tax would have brought in about $170,000 a year and it might have passed. It did in five counties, including Martin. Now the Washington County board may look to the sales tax on an upcoming ballot as a way to generate more money.
Peoples blames the failure of the referendum primarily on the “dirty little three-letter word, ‘tax,’” and that getting more information to the public about the tax and the uses from potential revenues may help the tax pass in the future.
Others are saying the same thing, but the overwhelming defeat of the tax may have county officials reluctant to even try.
Peoples won’t say if the land tax will appear again on the ballot, but he’s convinced something has to be done to break the cycle and bring growth to Washington County. That is something we believe has to happen. The question is how.