In search of revenue, Sampson leaders urge sales tax hike

Jun. 27—Sampson County leaders are looking for revenue and touted a proposed sales and use tax hike, saying it will go a long way toward generating much-needed dollars in lieu of putting the tax burden solely on property owners. A local resolution requesting state lawmakers raise the sales and use tax in Sampson up to an additional 1 cent was given the unanimous nod during a special-called Monday morning meeting of the Sampson County Board of Commissioners.

"The Sampson County Board of Commissioners finds that local sales and use taxes are a critical tool in addressing the funding needs of Sampson County and its residents," the resolution reads in part. "(The board) wishes to adopt an additional local sales and use tax of up to one cent."

In order for Sampson County to do so, the North Carolina General Assembly must pass a local act granting the county the authority to levy such a tax. The board requested as much in the resolution, adopted in a matter of minutes Monday.

The meeting opened and Attorney Joel Starling read the resolution into the record. One by one, commissioners commented on what they perceived to be the benefits of such a move, all citing it as an equitable sharing of the tax burden, before ultimately adopting the resolution in a 4-0 vote. Commissioner Thaddeus Godwin was absent from the meeting.

Board Chairman Jerol Kivett specifically pointed to the county's long-term debt of approximately $106 million, which the resolution stated "poses an additional barrier to the funding of county services." Kivett said the county debt, at the current rate of payment, won't be paid off until 2048. Of the 82.5 cent per $100 valuation property tax rate, 11 cents is spent on debt alone, the chairman noted. This might serve to expedite paying that off, he attested.

"This would give the commissioners behind us an opportunity to do more for the county," said Kivett.

Kivett, who also serves on the North Carolina Association of County Commissioners Board of Directors, said he has spoken with other leaders of rural counties, who have similar struggles. Kivett said if not for ARPA (American Rescue Plan Act) money this year, the county "would have been $6.5 million into our fund balance."

"We had some money there to help us," he attested, "but we're going to start out next year with a $6.5 million shortfall. We've got to be proactive in trying to address that with several different things, which we will with our budget. This will help to pay some of the bills. It won't pay all of the bills. This will generate some money, but it won't cover all of that. I think it's imperative that we do this. It's the fairest tax out there. I'm not a proponent of tax to start with, but it's a necessity to operate local government and look after public safety as well as everything else in the county."

Net proceeds from the sales and use tax is to be used for public purposes. An additional 1 cent sales and use tax would generate an estimated $5 million in revenue, Finance Officer David Clack told The Independent.

Imposing an additional tax can only happen after legislators give the OK — language of "up to" 1 cent means there is a possibly that lawmakers may only give permission for a fraction of that amount — and at least 10 days public notice and a public hearing is held.

"For a long, long time, I've advocated and was asking for a sales tax increase," said Commissioner Sue Lee. " I feel it's a more equitable tax than putting all of the burden on property owners. This gives everybody some responsibility when they make purchases within our county to contribute to our budget."

She credited Kivett for lobbying legislators. She said Senator Brent Jackson has been "receptive" to the county's request.

"It's long past due," said Commissioner Lethia Lee. "You can't keep pulling money and not putting money in. We spent a whole lot of money in salaries last year and we have to replace that with something. It's a better tax levied on our citizens than just taxing property owners. Everyone doesn't own property and they're left out. We want to give them an equal chance to pay into Sampson County, like everybody else. I don't think it's too much — maybe too little, but I don't think it's too much."

"It's very much needed," Lethia Lee continued. "We're here to work for the citizens of Sampson County to make things better, and I do believe this will make things a little bit better."

According to the board's resolution, Sampson County is ranked as a Tier One (most economically distressed) county by the North Carolina Department of Commerce, based on factors such as the county's unemployment, median household income, percentage population growth, and adjusted property tax base per capita.

Sampson's adjusted property tax base per capita, in particular, is the 18th lowest of North Carolina's 100 counties, "which poses a significant challenge in terms of the proper funding of county government, including critical public safety functions," the resolution stated.

The sales and use tax in Sampson has been 7% for the past 15 years, jumping a quarter-cent from 6.75% to the current rate via the Article 46 sales tax in 2008-09. Sampson already levies sales and use taxes authorized by Articles 39, 40, 42 and 46 of Chapter 105 in the North Carolina General Statutes.

Sampson was one of the first of surrounding counties to make the move back then to raise its sales tax when the Article 46 was given the go ahead. It will again be leading the pack this time around, if the Legislature gives the green light.

"When you look at your surrounding counties, we're the first one to jump, which is not a bad thing," said Commissioner Allen McLamb. "We can be the first ones to reach out for this tax adjustment. The surrounding counties will be a little bit below us, but I have a funny feeling that it won't be long (before) they reach out and do the same thing. Things are going to get even pretty equally."

Sampson received negative population growth in the period from July 2018 to July 2021, another point of emphasis in the resolution and one that McLamb emphasized.

"Our tax base and the money that we can draw from continues to dwindle," he remarked. "This is the fairest way for everyone who lives in Sampson County — I think this is a benefit for all of us."

He said the "up to 1 cent" leaves Sampson at the mercy of legislators in Raleigh, but said he believes the message is clear.

"They know what we're asking for," he said, "but we'll take what we can get."

Editor Chris Berendt can be reached at 910-592-8137 ext. 2587.