New Hanover County Commissioners are proposing a sales tax increase to help deal with budget shortfalls. They hope voters will approve the increase this November so they can ease budget problems caused by the struggling economy.
Poor retail sales and revenue from county fees have already forced New Hanover County to layoff employees and delay projects.
“Realizing that county services are cut way back, we’ve got to find a way to bridge the gap so to speak,” said New Hanover County Commissioner Jonathan Barfield.
North Carolina has a state sales tax of 4.5 percent.
Counties add to that, to raise money for the local government. In all five of our area counties, the sales tax is 6.75 percent.
New Hanover County Commissioners want to ask voters to approve a one-quarter of a percent increase.
If approved, New Hanover would be the eighth county in the Tar Heel State with a 7.0 percent sales tax and would be just one-quarter percent behind Mecklenburg County for the top spot.
Storeowners said they don’t think it will impact sales at the cash register. “Nobody’s going to stop and say no I’m not going to buy that because it’s seven percent,” said Mary Ellen Golden of Golden Gallery.
But they’re worried it could make getting people into the store more difficult.
“I feel like an increase in taxes would possibly cause tourism to slow down, and that’s what this town is based on,” said Port City Pottery Owner Pam Grenough.
The county is dealing with a $12 million budget deficit for the 2009-2010 fiscal year that takes effect in July.
Officials say the increase would raise almost $7.5 million a year, but that could change with the economy. “Our citizens demand and expect a certain level of service that has to be paid for and the sales tax is the fairest way to do that,” said Commissioner Jason Thompson.
Some county residents said they’re not opposed to increasing the tax, as long as it’s the last resort.
“First thing are we fiscally responsible and if we’re sure of that and there’s no other choice, then that’s what we have to do,” said Tom Barber of Wilmington.
Most commissioners said they hope a sales tax increase will prevent property tax increases in the future.
Even if residents approve the sales tax increase in November, it won’t take effect until April of 2010.