Tax before Orange voters in May

County commissioners approve putting a land transfer tax, a quarter-cent sales tax increase or both on the primary ballot

CHAPEL HILL -- Orange County Commissioners gave the go-ahead Wednesday to put a tax revenue measure on the May primary ballot.

They still haven't decided, however, whether to go with a land transfer fee or a sales tax increase -- both options approved by the legislature this year to help counties raise additional revenue.

Some commissioners favored the land transfer tax option, a 0.4 percent fee applied when someone sells property. On a $500,000 home, the fee would be $2,000. Such a fee would generate a little more than $4 million a year for the county.

The second option -- a quarter-cent sales tax increase -- would net the county a little more than $3 million a year.

The county can put both options on the ballot for voter approval, but only one can be imposed, according to the legislation.

Commissioner Mike Nelson voiced strong support for the land transfer option, calling the sales tax "regressive" because it applies to all county residents regardless of income level, and not just to those selling property.

Board member Barry Jacobs said he wanted to discuss putting both options on the ballot, saying he expected organized opposition to the land transfer tax. He felt the sales tax increase might not be as regressive as Nelson said, in part because it would not apply to food sales.

Because the motion did not indicate which option the county would choose to put before voters, Nelson voted against it, saying the decision to go with the land transfer fee should be obvious. "To me it's clear, and there's a principle at stake," he said.

The board also decided to appoint a community task force both to educate the public and to advise the board.

Jacobs said it was important to tell the public that while the county may gain an additional revenue source, it won't be in a better financial position. "The ultimate effect of the legislature's actions was to take more money from us" than either option could replace, he said, referring to changes the legislature made in the way it distributes sales taxes to counties.

There are no restrictions on how the county might choose to use the funds, though some board members are already floating possibilities.

"This would be very, very useful in school facilities," Commissioner Alice Gordon said.

"It's incumbent on us to say something to the public on how we'll use these revenues," board Chairman Moses Carey Jr. said, adding that there are a number of different possibilities.