In Today’s Herald: Business Privilege Tax on Agenda

The much-debated business privilege tax the Sanford City Council adopted nearly a year ago will be on the city’s Law & Finance Committee meeting agenda today. The committee, made up of the full council, will meet more formally on Tuesday night next week. At that point the issue may be voted upon.

The only thing that can happen in today’s meeting is a discussion about the tax. The council might choose to make a recommendation by consensus – essentially a non-binding vote, likely by roll call – about the tax, but a more likely scenario is discussion today, followed by a formal vote on Tuesday to repeal or keep the tax. If it’s repealed, the repeal will be for the 2008-2009 fiscal year, meaning those businesses affected by the tax THIS year will stay have to pay.

In any case, the BPT will be a hot topic for the next week. The North Carolina Americans for Prosperity group is helping its Lee County branch – formed last year specifically to fight the tax – work to get it defeated. AFP has placed ads in The Herald, as well as yard signs around town, calling for the tax’s repeal. Its leader, Lloyd Jennings, has also gotten a permit to hold a “protest demonstration” prior to Tuesday’s meeting at City Hall.

The BPT passed by a 5-2 vote a year ago, as you might recall. One of the “for” votes, Dan Harrington, was defeated by Charles Taylor in the November election. Taylor vowed during the race to turn back the tax. At the time of Taylor’s election, The Herald editorialized: 

“That one vote, Taylor’s vote, is significant because it could very well represent a chorus of voices opposed to the tax. It’s hard to say statistically what role the tax played in voting, but certainly means something that two of three races on the council were won handily by candidates committed to repealing the tax.

This ‘chorus of voices,’ if it is something tangible, was mostly ignored earlier this year when the tax, which was instituted as a part of the city’s budget by then-City Manager Leonard Barefoot after considerable pre-vote selling by Councilman Steve Brewer, was passed by the council. Many factors went into the decision-making process – by council members on this tax, and by voters on these council members – but few nuggets this election cycle carried as much luster (at least for the candidates) as the privilege tax.

We won’t regurgitate all the details of the much-debated tax here. Heaven knows, this election has made us regurgitate enough. You’ll remember, though, that Barefoot presented the tax – which is common in cities of Sanford’s size across North Carolina – as an alternative to a property tax increase to fund the city’s budget. Among the selling points made by Barefoot and Brewer was that it would generate significantly higher tax revenues from ‘big box’ stores doing business within the city limits since the tax is calculated on gross sales receipts, and that it would put more of the tax burden on people from outside Lee County. Incumbent council member Mike Stone, who handily beat his opponent to win a four-year term in the at-large seat, was the tax’s most vocal critic, joining local business owners and the Sanford Area Chamber of Commerce in saying it was an unfair, inequitable levy probably not needed because the council hadn’t adequately scoured the budget for possible cuts.

Last week, a third party joined the fray – a local chapter of ‘Americans for Prosperity,’ which said its priorities include helping to ‘secure the repeal of the new business privilege tax in Sanford.'”

The fray is ramping up beginning today, officially. Council members Linwood Mann and J. D. Williams will apparently be missing from today’s L&F meeting with prior commitments. They’ll likely be present if a vote’s taken Tuesday. Assuming no one on the council a year ago changes his vote, the likely scenario is a 4-3 defeat of a motion to repeal the tax – unless, of course, one of the “4” votes changes his mind.

Tipping the scale may be public sentiment about the tax and the city’s own $12 million reserve fund, which according to some officials is much more than what the state requires. The BPT was supposed to raise about $250,000 in revenues. (Incidentally, businesses required to pay the tax are being notified now about how much their tax bill is; the taxes are payable no later than May 31.)

We’ll have details about today’s discussion in tomorrow’s Herald, and we’ll be following the issue through next week’s vote. Keep reading…

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One Response to In Today’s Herald: Business Privilege Tax on Agenda

  1. […] bhorner3 wrote an interesting post today on In Todayâs Herald: Business Privilege Tax on AgendaHere’s a quick excerptThe much-debated business privilege tax the Sanford City Council adopted nearly a year ago will be on the city’s Law & Finance Committee meeting agenda today. The committee, made up of the full council, will meet more formally on … […]

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