RALEIGH — The Wake County Board of Commissioners will make a last-minute decision next month on whether to hold a fall referendum on a quarter-cent local sales tax hike to generate revenue for schools.
During its regular meeting Monday, the board held a sometimes contentious discussion on the possibility of putting the issue before voters. The three Democrats on the board favor a referendum, while the four Republicans oppose it.
Commissioner Caroline Sullivan, who had asked for the topic to be placed on Monday’s agenda, told the board that the county needs to be able to offer teachers enough money to attract and keep them.
“I am simply asking that we let the voters decide if they think it is important for Wake County to remain competitive in teacher recruitment and retention, if they think it is important that we pay our teachers more,” Sullivan said. “If they do not, we cannot levy the tax.”
Wake – like every other county in the state – is waiting for the General Assembly to approve a budget. Teachers are paid by the state, and the legislature has indicated it will increase teacher pay in the 2015 budget, perhaps by as much as 11 percent. In addition to the state salary, Wake County supplements its teachers’ pay by an average of $6,204 per year.
If the state gives teachers a raise, the county’s supplement also will rise, because it’s a percentage of each teacher’s state salary.
To help pay for a salary increase, state lawmakers may pass along to counties some of the other costs of education, such as workman’s compensation coverage.
Sullivan said the county should be prepared to be faced with a budget shortfall in the tens of millions of dollars, depending on what the state decides.
The Board of Commissioners’ plan, hammered out as it crafted its own 2015 budget in recent months, is to wait until the state approves a budget before deciding what to do about teacher salaries. Its options will be further clarified after the Wake County school system closes out its books for the fiscal year that just ended and determines how much money in its fund balance could be returned to the county.
County Manager Jim Hartmann and schools Superintendent Jim Merrill will be in discussions through the summer and fall.
If the county were to come up significantly short when the numbers are all in this fall, it will be too late to schedule a referendum on the sales tax increase.
So Sullivan said she would like to see the board vote Aug. 4 on holding a November referendum on a quarter-cent local-option sales tax hike. Aug. 4 is the last regularly scheduled board meeting at which the vote could be held and still give the county Board of Elections time to prepare for a November referendum.
Shoppers in Wake County now pay a 6.75 percent sales tax; 4.75 percent goes to the state and 2 percent goes to the county.
The quarter-cent increase would generate an estimated $27 million a year in additional revenues, which the county could spend on teacher salary supplements or any number of other things. A Wake County household with the median income of $65,826 with an assumed 24 percent taxable spending would see an average impact of $40 per year.
But Republicans on the board are opposed to a sales tax hike – or even a referendum on a sales tax hike – after already approving a budget for the new year with a 4.4-cent property tax increase to fund a school-building program. At one point during Monday’s meeting, it appeared that the board would put the matter to a vote on the spot. It would have failed 4-3 along party lines.
Commissioner Joe Bryan said he could make that decision now and saw no benefit to waiting until Aug. 4. He challenged those who supported the referendum to make a motion to hold one. Otherwise, he said, they were just posturing.
“Why are you delaying making your motion?” he asked.
Lack of action
Commissioner Betty Lou Ward took up the challenge, saying she was frustrated with what she saw as the board’s lack of action as teachers flee their profession or leave here for higher-paying jobs in other states.
“We have done everything except act like leaders,” she said.
Commissioner James West said there was no reason to push the issue immediately to a vote and that the board should be able to productively discuss different ideas for helping the county move forward.
After more back and forth and some discussion with Sullivan, Ward withdrew the motion in favor of putting off a vote until Aug. 4.