Sales tax increase to be decided by voters, not legislators

By Lesley Jenkins
Star staff
ljenkins@starhq.com

   Washington and Carter County citizens will face the option of raising their respective counties' sales tax to 9.75 percent when they cast their votes on Feb. 10.
   If voters decide to accept the increase, Washington County's sales tax will be raised from 9.5 percent and Carter County's from 9.25 percent to 9.75 percent for each county.
   Carter County officials placed the referendum on the Feb. 10 ballot at the Dec. 8 meeting of the county commissioners. The 15-6 vote was cast a few days before the deadline to place it on the February ballot. According to County Mayor Dale Fair, the referendum would have been forced to wait until the August 2004 election for citizens to vote on increasing the sales tax, and by that time, the option might have been taken away by the state legislature.
   "With the state looking at all different types of revenues out there, this is one they've talked about capturing," Fair said. If a city or county has not exercised their right to the sales tax, then the state legislature can take it instead of it going to the specific county or city. That is the purpose of now. Once the state has done it, then it is gone.
   "It is really a timing issue for us. How the state budget works is that they are going to make a decision fairly soon. If we hadn't actually passed it in the last commission meeting, we wouldn't have been able to give our citizens the option to make that decision. It would have been down at Nashville," said Jason Cody, county finance director.
   County Attorney George Dugger said, "2.75 percent is the maximum that cities and counties can go up to."
   The legislative session can last from January to May or June, and if the state legislature decides to increase the sales tax to 9.75 statewide, counties that have not already increased the sales tax to the maximum would never have the chance to do it again. The increased sales tax revenue would then go directly to the state budget, instead of to the county or city.
   Cody said about the way the state works through their budget, "They take the easy road out every year. They look and say, 'How far we short?' And what is the easiest money to make that balance. They have consistently done that for the last few years."
   Increasing the sales tax to the maximum would be an easy way to gain additional revenue without imposing an income tax.
   A few years ago, they did a sales tax increase from 6 to 7 percent, which goes directly to the state.
   If county voters pass the sales tax increase for Carter County, approximately $700,000 of additional revenue will be brought into the county. That does not include the city of Elizabethton which will possibly generate 2 to 3 times that amount because of the many retail stores which are in the city limits.
   Of this $700,000, the state requires $525,000 to go towards the school systems and the remainder going to the county's General Fund, which would be used for many capitol improvements.
   The major capitol improvements that the county will soon be facing are a new jail, a new school in Stoney Creek, or possibly a pay increase for county employees in the next fiscal year.
   "It is hard to say right now, we would like to be able to say that we don't have to look at another type of revenue, because we would have this one. It is not a huge amount but it could be sufficient to what we need,"said Fair.
   In the end result, the people benefit the most, especially property owners. The majority of revenue comes from property taxes, but this increase would be funded by every consumer.
   "Bottom line, everybody would benefit: The city, the county, the schools, and the taxpayers of Carter County," Fair said.
   Tracy Harris, administrator of elections, said Carter County has 29,286 registered voters as of Wednesday. When the last election, similar to the one in February, was held in March 2000, only 4,026 voters turned out to the polls.
   The $2,300 charge for the referendum pays for the legal costs associated for early voting, printing on the ballot, setting up the machines and tally sheets.
   Early voting begins Jan. 21 and continues through Feb. 5 at the election commission office in the courthouse from 9 a.m. to 4 p.m., Monday through Friday, and on Saturdays from 9 a.m.-12 p.m. Absentee votes will be accepted until Feb. 3 by mail.