County voters not buying sales tax measure

By Thomas Wilson
STAR STAFF
twilson@starhq.com

   Carter County citizens answered a resounding "no" to raising the county's local option sales tax set forth in a county-wide referendum in Tuesday's county primary.
   According to unofficial results Tuesday night, 4,457 county citizens, or 67 percent, voted against raising the local option sales tax by one-half percent while 2,284 voters, or 33 percent, cast ballots in favor of the measure.
   The referendum gave citizens the opportunity to vote yes or no to increase the county's local option sales tax rate from 2.25 percent to 2.75 percent. The referendum failed mightily in all eight county voting districts.
   The referendum's fate seemed determined when early voting totals were released shortly after 8 p.m. Tuesday night. More than 1,100 county citizens had cast ballots against the tax increase with just over 600 citizens voting in favor.
   Tuesday's election saw anemic voter turnout with roughly 26 percent of registered voters in Carter County going to the polls. Of the more than 28,000 registered voters eligible to vote on Tuesday, final election results reported only 7,494 total ballots cast. Overcast skies and cool temperatures as well as the sales tax referendum being the only controversial county item on the ballot likely contributed to the low turnout.
   By early afternoon, the Hunter and East Side precincts had barely exceeded 200 total voters. Linda Payne, an election official at the Happy Valley voting precinct, said the county's west end would have a far heavier turnout at the general election.
   "The November election is the big thing out here," said Payne.
   East Side precinct counted barely 150 voters late Tuesday afternoon, according to election volunteers. "We've had a good number of early voters," said Lillian Bullock, a polling judge at East Side Elementary. "Not a lot of people have come in."
   However, Tuesday's primary did see higher voter turnout compared to the 2000 county and presidential preference primary, when only 10 percent of the county's registered voters -- around 3,000 citizens -- cast ballots.
   The referendum's failure closes the door to a potential revenue source for both county and city governments. Carter County government officials estimate the one-half percent increase would produce approximately $700,000 for the county. The city of Elizabethton Finance Department estimated the city stands to receive $533,000 in new sales tax revenue. If the sales tax referendum passed, the Carter County School System would receive up to $500,000, and Elizabethton City Schools could have seen an additional $200,000 in new revenues.
   Local government leaders have been fidgety about the possibility of the state government directing municipal governments to raise their own local option sales tax rate, while the additional earned revenue would go back to Nashville.
   The Tennessee General Assembly voted to increase the state sales tax from six to seven percent in last year's session. The Legislature also voted to increase the local sales tax by raising the cap on single-item purchases from $1,600 to $3,200, with the state keeping the increase.
   Sales tax revenues appear to be on the rise in the state. The Tennessee Department of Revenue reported last month that December 2003 sales and use tax collections came in at $458 million, up $17 million or 3.9 percent over December 2002 collections. The department reported the state's retail trade group climbed 3.8 percent over collections from last year while sales tax receipts from the services group were relatively unchanged, up 0.8 percent over last year's collections.
   A city or county can have a local option sales tax rate capped at 2.75 percent under state law. The state government captured seven percent of state-shared revenues -- approximately $150,000 -- going to Elizabethton to balance Tennessee's fiscal year 2004 budget. City of Elizabethton employees have received no step pay raises in two years; open city positions have been effectively frozen, and departments throughout city government have been forced to cut spending.
   City administration estimated that if the referendum is approved, the new sales tax would factor out to an additional 50 cents in tax money for every $100 spent by consumers in Carter County.
   Two referendums placed on the ballot for Elizabethton citizens that would raise the city's local option sales tax by one-half percent failed during the mid-1990s. Both of those referendums earmarked additional sales tax money to the county school system.
   Carter County voters were not alone in their opposition to a local option sales tax increase. Across the state line, Washington County voters also rejected a sales tax referendum by a margin of almost 3,000 votes. According to unofficial election totals from that county's Election Commission, 7,034 people voted against the referendum while 4,122 citizens voted in favor of the sales tax increase. The referendum would have increased Washington County's local option sales tax rate from 2.5 percent to a maximum rate of 2.75 percent.