County uses tax rate cut promise to sell school bonds to voters
The May election in which county voters will determine the fate of a $1.7 billion school bond referendum is just around the corner, and it’s one of the reasons the county of Guilford stepped up its efforts to pass those bonds and also get a quarter-cent increase in the sales tax passed to generate an additional $18 million or $20 million in new revenue a year — money whose county will need if it starts paying off massive school bond debt.
Last week, at the regular council meeting on Thursday, April 7, the council’s six Democratic commissioners passed a motion that essentially waves a carrot in the face of landowners who may be on the fence on the issue. The motion asks council, if the sales tax hike passes, to reduce the county’s property tax rate by about 3 cents per $100 of estimated property value.
Shortly after that April 7 meeting, the board began using the resolution as a sales tool to push through the sales tax hike.
In a press release sent to the media, county officials let the community know that the Guilford County Board of Commissioners voted April 7 to communicate their intentions through the resolution, “to lower the rate of Guilford County property tax to an amount equivalent to sales and use the tax revenue when passing the 2022-23 fiscal year budget. This commitment is expected to reduce property tax by at least three cents, if sales and the use of a quarter of a cent are accepted.
Alston, the main architect behind the move, released the following statement.
“The proposed sales tax is expected to generate approximately $20 million in revenue annually,” he wrote. “While the recent reassessment has increased property taxes for most homeowners, this resolution would save them money on their property tax bill if they support the quarter-cent sales tax. Our goal is to ease the burden on homeowners. The quarter-cent sales tax, which is paid by everyone, whether renters or tourists, will help generate revenue to help cover our $2 billion school needs. It’s a way for owners to vote themselves a tax reduction. Let’s be clear…this school requirement and quarter-cent sales and use tax is about putting our kids first, not just the buildings. The state of our schools has a direct impact on our children’s ability to learn.
The board also took the decision to pledge that, if the local sales tax were passed, the proceeds “would be used exclusively to fund school construction needs and related debt repayment.”
The council can, however, promise that some voters are wary of this type of commitment. The current board of commissioners cannot bind future boards – which may have very different priorities a year from now – or three years from now or eight or nine years from now. So the current council can make the promise, but cannot do it for future councils.
Moreover, in the past, referendums on school bonds – such as those approved by voters in May 2008 – can be sold to the community for certain projects, and, years later, it turns out that school projects that obtained the money were different from those used by county and school officials to sell the bond referendum to the community.
Guilford County officials are also currently working to convince the community of the need for this very large amount on the proposed new school bond, saying in a press release: “A 2019 independent facilities assessment study jointly funded by the Board of County Commissioners and the school The board found schools in the district to be in a serious state of disrepair, with 50% of schools rated in poor or unsatisfactory condition. Guilford County schools currently have more than $2 billion in facility needs, including more than $800 million in deferred maintenance.
Former Guilford County Commissioner Alan Branson, who has been involved in these discussions for years between the school system and commissioners, said there have been several studies of school needs in recent years and that they don’t all say the same thing. Branson pointed out that county voters had just approved a $300 million bond in the last election, and the school system was just beginning to spend most of that money.
Guilford County also points out in its media advisories that several surrounding counties — and Guilford’s peer counties like Forsyth, Randolph, Orange, Wake and Mecklenburg counties — have enacted a similar sales tax hike.