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Subcommittee Recommendations: Sales Tax <br /> • Broaden sales tax base to include consumer services. <br /> • Lower sales tax rate. Temporary higher rate made permanent at 4.25% <br /> • Highway use tax rate to regular sales tax rate (funds dedicated to transportation <br /> infrastructure, 1% = $200 million). <br /> • Excise taxes converted to ad valorum, set at the general state and local rate. <br /> Subcommittee Recommendations: <br /> Local Revenues and Responsibilities <br /> • Medicaid to be assumed entirely by the state. Passed based on sales tax swap. <br /> • Menu of options: Occupancy, Impact, Prepared Food, Vehicle Tag etc. <br /> • Land Transfer Tax (Deed Stamp) .4% option passed. <br /> • Local sales tax .25% option passed. <br /> • Efficiencies and public/private partnerships <br /> Commissioner Nelson arrived at 6:19 p.m. <br /> Dr. Karl Smith, from UNC School of Government, spoke next. <br /> Revenue Options <br /> - 1/4 Cent Sales Tax <br /> - .4% Land Transfer <br /> - Existing Property Tax <br /> Criteria to Consider <br /> - Revenue Prospects <br /> - Revenue Stability <br /> - Incidence (who ends up paying for the taxes?) <br /> - Effects on Growth <br /> - Fairness <br /> - Ease of Collection <br /> Revenue Prospects <br /> - Which tax raises more money today <br /> - Which tax has stronger growth in the future <br /> o Sales tax will tend to grow slower than the local economy unless there is a <br /> big retail magnet <br /> o Land Transfer will tend to grow as fast or faster than the local economy but <br /> is dependent on the health of the real estate market <br /> o Property tax is very slow in rural areas very fast in urban and suburban <br /> areas <br /> Relative Growth Rates <br /> - Land Transfer Growth: 12% <br /> - Sales Growth: 4% <br /> Revenue Stability <br />