Prepared-foods tax off legislators' menu

Durham board's leftover plea founders

Staff WriterJanuary 20, 2007 

— Durham County's annual attempt to sell local legislators on the merits of a prepared-foods tax fell flat yet again Friday.

For at least a decade, county officials have asked for legislation that would create a 1 percent tax on food served in Durham restaurants. The topic dominated an annual breakfast Friday attended by county commissioners and members of Durham's delegation.

"It appears we're still going to reach a stalemate," state Rep. Mickey Michaux said.

As in the past, state Rep. Paul Luebke emerged as the proposal's chief opponent.

Luebke's stance

This year, county officials proposed the tax as a way to raise $5 million to help bolster a number of Durham's arts initiatives through the Durham Cultural Master Plan.

While acknowledging the merits of the arts programs, Luebke insisted that a new tax -- one that, he said, would hurt low-income residents -- is the wrong way to raise the revenue. Arts initiatives should be funded through regular county revenue sources such as property and sales taxes, Luebke said. He further argued that the county is missing out on a large chunk of property tax revenue by not performing housing revaluations every four years, as is allowed. If the county, which last conducted a revaluation in 2001, did it more often, residents would pay more taxes on their homes, Luebke said.

"Your failure to revalue after four years gives a tax break to the well-to-do in Durham," he said.

County officials disagreed.

Counties can revalue properties at any point from four to eight years after the previous revaluation. The county declined to begin the revaluation process in 2005 or 2006 because its commercial property vacancy rate -- particularly in Research Triangle Park, which makes up 50 percent of the total tax base -- rose dramatically during the economic swoon of 2000 and 2001.

Doing so, county officials say, would have put too much of the tax responsibility on homeowners. "We made the right decision," County Manager Mike Ruffin said.

The county did not raise taxes for the current fiscal year, but Ellen Reckhow, the county board's chairwoman, said a tax increase next year is inevitable because of several large capital projects facing the county and the school system.

Michaux suggested taking the food tax issue to a referendum, an idea Reckhow gave a lukewarm endorsement.

"If that's the only way, we'll move forward with it," she said, calling the process of selling voters on the idea "an extra hoop."

Luebke, Michaux and state Rep. Larry Hall attended the meeting, while state Rep. W.A. "Winkie" Wilkins and state Sens. Jeanne Lucas and Bob Atwater did not. All county commissioners except Philip Cousin attended.

Luebke and Michaux agreed with another county priority: the need for six more magistrates, three new assistant district attorneys, five court clerks and one more District Court judge. They said the magistrate positions had the best chance for funding because Durham has received no new magistrates since 2004.

They also said they agreed with the county's desire to impose impact fees on home builders to help alleviate the financial strain those new homes put on the school system. But they acknowledged that many of their colleagues in the General Assembly don't agree.

"I don't think anyone in the [Durham] delegation has a problem with the impact fee," Michaux said. "It ain't us."

Staff writer Eric Ferreri can be reached at 956-2415 or eferreri@newsobserver.com.

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