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Commissioner Brown - Budget/Purchasing - To Approve a Non-Binding Advisory Referendum, Pursuant to Chap.105, Art. 46, for a 1/4 cent (0.25 percent) Sales Tax, and Request the Gaston County Board of Elections to Schedule a Referendum for May 8, 2018
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STAFF CONTACT
Matthew Rhoten - Budget and Purchasing - 704-866-3048
BUDGET IMPACT
budget
N/A
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BUDGET ORDINANCE IMPACT
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BACKGROUND
When we reviewed the school district's $250 million bond issue, we publicly stated the upfront projected impact on the tax rate would be
FY 19 FY20 FY21 FY22 FY23 FY24
10.25 cents 0 cents 0 cents 0 cents 0 cents 0 cents
The most cost effective way for the taxpayers is for the county to pay for the debt upfront rather than incrementally over time. Incrementally raising the tax rate over seven years would result in 14 cents as opposed to 10.25 upfront. It costs the taxpayer less to fund the debt with an upfront tax increase opposed to incrementally over time.
If the voters approve the quarter cent sales tax on the referendum, and if the money were dedicated to school capital and debt service - and we deposited the funds into this separate account before the revenue was needed and drew it down when it was needed - the impact on the tax rate from the $250 million upfront would be:
FY19 FY20 FY21 FY22 FY23 FY 24
0.63 cents 0 cents 0 cents 0 cents 0 cents 0 cents
It should be noted however that a tax rate increase is not necessary if the quarter cent is approved. The thought would be to see if revenue projections increase to a sufficient amount over time in order to fund the full $250 million with sales tax revenue only and no property tax increase necessary.
For the median assessed valued of a home, $125,100 that means a savings of $641.14 in property taxes over the five years - and the savings continue every year. For a home worth $300,000 that would be a savings of $1,537.50 for five years. But won't that "savings" have to be ma...
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