Turnout Light But Concerns Raised At First Public Hearings On Proposed Sales Tax Hike

April 12, 2007
Dwayne Page

The first public hearings on the proposed local option sales tax increase/property tax cut didn't attract many people Thursday night at Liberty or Dowelltown but a couple of people who did speak expressed their concerns.

At the Dowelltown hearing, Snow Hill resident Mike Antoniak suggested that the proposed sales tax hike would amount to an overall tax increase for most residents of DeKalb County, even with a property tax cut, and he took issue with recent public statements made by County Mayor Mike Foster.

Foster recently told the local media that the annual property tax bill on a $200,000 piece of property would be reduced by approximately $90 with the 19 cent reduction in the property tax rate. He said it would take nearly $8,000 in purchases by a consumer for the 1.25 cent hike in the sales tax to go over the $90 savings.

Antoniak says he did some research and found that only about 6% of the property owners in DeKalb County have land assessed at more than $200,000. Using Foster's scenario, Antoniak says for 90% of the property owners, this would not be a tax swap, as Foster contends, but a tax increase. \"The logic works until you look at what percentage of homes or properties in the county is assessed at $200,000 or more. I called the Tax Assessor's office and he referred me to the Division of Property Assessments in Cookeville. This is what she told me and I had her to repeat it. There are 1,047 pieces of property in DeKalb County, out of 17,000, assessed above $200,000. That's six percent. So that would mean for 90% of the people here, if they spend just the $8,000 (purchases where sales tax is applied) their taxes are actually going to increase. I mean $8,000 is just $150 a week for groceries.\"

As far as the overall plan is concerned, Foster still insists that it would basically amount to a tax swap, with the loss of funds from the nineteen and a half cent property tax cut to be offset by new revenue generated from the proposed sales tax hike, which is projected to be the equivalent of twenty one cents on the tax rate. Foster says the plan would give property owners a 10% tax cut while broadening the sales tax base, distributing the tax burden among a greater number of people including tourists and others who work here but reside elsewhere. \" You have a choice of broadening the base of who is paying. You can't continuously forever rely on property tax payers.\"

At the Liberty meeting, Myron Rhody, another Snow Hill resident, weighed in on the debate, saying while he supported the sales tax increase last year, he has reservations about it now. \"I voted for the sales tax increase last year because that's more fair. But I don't like this way it's coming now. It's almost like you're saying 'I'm going to twist your arm a little bit or encourage you a little bit by saying we're going to give you this (property tax cut)if you'll take that (sales tax increase) now, because it didn't go (pass) before. I'm just telling you what I have heard all over the county. It's everybody you talk to, even the ones who were for the sales tax increase the last time and voted for it. They don't like this at all. It smells fishy to them.\"

Foster responded saying \" Vote against it and it will smell like higher taxes.\"

Rhody added that he would tend to favor a wheel tax. \" You've got people who live in the projects. You've got people who are not local residents of the United States. But they all drive cars. I'm not in favor of a tax period. But we've got to have it. I'd rather see a wheel tax come in or a luxury tax. I've got a boat. You may have a boat. But we don't have to have those things to live. You have to have groceries. You have to have clothes. There are some people who are just barely getting by.\"

The county commission, in 2003, raised the property tax rate by 36 cents. Last September, the commission raised the rate by 39 cents.

County officials say if the sales tax referendum is approved by the voters in a special election on Thursday, May 17th, which would raise the local option sales tax rate from 1.5 to the maximum of 2.75%, the county commission will reduce the property tax rate by at least nineteen and a half cents.

Whether or not the sales tax referendum is approved, county officials have not ruled out the possibility of some other tax increase or new tax within the next four or five years, should the need arise, due to inflation.

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