Sales tax best option on
referendum

One of the most beneficial actions of the recent session of the General Assembly was the decision to end counties’ reimbursements into the Medicaid program.

Poor counties like Columbus, which have a high percentage of their populations on Medicaid, were responsible for a disproportionate amount of the burden.

For example, about one-third of all property taxes in Columbus County went just to reimburse the state for Medicaid. Counties like Wake and Orange had less than 5 percent.

The General Assembly found a fair way to change this injustice. In order to recoup the lost revenue (the money must still be paid to the federal government), the state will keep some sales tax now given to all counties. In return, the state has given counties the option to levy either a 1/4-cent sales tax or a land-transfer tax when property is sold to replace sales tax revenue taken by the state.

The idea is solid for rural counties. The amount Raleigh pays to the federal government doesn’t change, but the wealthier counties will contribute more because their sales tax revenues (or land tax transfers) are so much higher.

Monday night, the commissioners voted to opt for a 1/4-cent sales tax referendum rather than the land tax option because it will replace more revenue. Counties like Pender, where land and houses are sold regularly, will ask voters there to approve the land transfer option.

We support a vote for the 1/4-cent sales tax. The commissioners are correct by saying that if voters don’t pass the referendum, then raising property taxes is the only other option.

Some call sales taxes a regressive tax because everybody, rich and poor, pays the same rate. Yet, with the county’s current financial condition and the extra assessments in two large water districts, it seems fair that everyone who buys (and pays sales taxes on) something participates, not just property owners.

The General Assembly is to be commended for ending the Medicaid reimbursement burden on counties. No one likes to vote a tax increase on themselves, but in this case, if the referendum result is “no,” property owners especially will find the result most regretful.