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2 <br />• There are no legislative requirements for counties to share the additional one-quarter <br />cent sales tax with local municipalities. <br />• If voters approve the sales tax referendum, the Board must adopt a resolution to levy the <br />tax in order for the tax to take effect. <br />According to Board of Elections Director, Tracy Reams, mailing of absentee ballots to <br />voters is set for September 15, 2008. In order to allow sufficient time to print ballots and <br />program voting machines, the Board of Elections must receive notification from <br />Commissioners regarding the addition of the one-quarter cent sales tax referendum for <br />the November 4, 2008 election date, no later than August 29, 2008. Per the Board of <br />Elections, the notification may be in a form other than a final resolution. There is no regularly <br />scheduled Board meeting between tonight and August 29, 2008. <br />State statute specifies ballot language that would appear on a referendum for aone-quarter cent <br />additional sales tax: <br />[ ]FOR [ ]AGAINST <br />Local sales and use tax at the rate of one-quarter percent (0.25%) in addition to all other <br />State and local sales and use taxes. <br />A draft resolution calling for an advisory referendum for November 4, .2008 on the question of <br />whether to levy aone-quarter percent sales tax is provided as an attachment for the Board's <br />reference. Should the Board agree tonight to move forward with the one-quarter cent sales tax <br />referendum on the November 4, 2008 ballot, staff will prepare a final resolution for approval at <br />the Board's September 2, 2008 regular meeting. <br />FINANCIAL IMPACT: Other than costs to advertise the public hearing, there is no financial <br />impact directly associated with the Board receiving public comments and discussing the <br />potential referendum to levy aone-quarter percent sales tax at the August 19, 2008 regular <br />Board meeting. Any subsequent decisions by the Board may have financial impacts which staff <br />can evaluate and report findings to the Board at a future meeting. <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 2.3 cents on <br />the anticipated 2008-09 fiscal year tax rate, with the voter-approved and Board-implemented <br />one-quarter cent additional sales tax. However, given the economic downturn currently being <br />experienced across the nation and evidenced in the County's recent lower than anticipated <br />sales tax collections, it is likely that $3 million is optimistic and not reflective of today's current <br />conditions. <br />RECOMMENDATION(S): The Manager recommends that: <br />1. Commissioners hear comments regarding the potential levying of aone-quarter cent <br />sales tax; <br />2. The Board discuss a potential referendum on an additional one-quarter cent sales tax in <br />Orange County and provide any comments and direction to staff <br />3. Consider taking action on the attached Draft Resolution Regarding the Conduct of an <br />Advisory Referendum on the Question of Whether to Levy a Local Sales and Use Tax <br />