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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: June 24, 2008 <br />Action Agend <br />Item No. ~' <br />SUBJECT: Discussion on a Potential One-Quarter Cent Sales Tax Increase Referendum <br />DEPARTMENT: County Manager <br />PUBLIC HEARING: (Y/N) No <br />ATTACHMENT(S): <br />None <br />INFORMATION CONTACT: <br />Barry Jacobs, Chair <br />Laura Blackmon, 245-2300 <br />PURPOSE: To provide an opportunity for the Board to discuss a potential referendum on a <br />one-quarter cent additional sales tax in Orange County and provide any comments and direction <br />to staff. <br />BACKGROUND: As part of a comprehensive and complicated "swap" of county and state <br />revenue sources approved by the North Carolina General Assembly during its 2007 Session, <br />the legislature authorized county boards of commissioners to enact one of two new local <br />revenue sources, subject to voter approval in each county considering implementation of the <br />new revenue sources. Counties may conduct a referendum on aone-quarter cent additional <br />sales tax, a 4% land transfer tax, or both: County Boards of Commissioners can implement only <br />one of the two taxes if voters approve both. <br />This item provides the opportunity for the Orange County Commissioners to discuss a potential <br />referendum to increase the sales tax by one-quarter cent in Orange County. <br />The specific ballot language that would appear for aone-quarter cent additional sales tax is <br />specified in the State statute, as follows: <br />[ ~ FOR [ ]AGAINST <br />Local sales and use tax at the rate of one-quarter percent (0.25%) in addition to all other State <br />and local sales and use taxes. <br />FINANCIAL IMPACT: There is no financial impact directly associated with the Board <br />scheduling to receive public comments at the June 24, 2008 Regular Board Meeting on a <br />potential referendum on aone-quarter cent additional sales tax in Orange County. Any <br />subsequent decisions by the Board may have financial impacts which can be evaluated by staff. <br />Preliminary estimates provided by the North Carolina Association of County Commissioners in <br />August 2007 suggest that based on historical patterns, Orange County could expect additional <br />annual sales tax revenue of roughly $3.0 million, or the equivalent of approximately 1.4 cents on <br />