Commissioners Perry Yates, Billy Kennedy and Chairman John Welch discuss the proposed referendum for a quarter sales tax increase at the Feb. 6 meeting.

BOONE — The county commissioners unanimously passed a resolution at the Feb. 6 meeting to allow a vote on a quarter-percent sales tax increase to be included on the May primary ballot.

The commissioners discussed the referendum for the quarter-percent sales tax increase at the 2017 annual budget retreat. The increase would go toward funding for capital improvements for Watauga County Schools and funding for a new area recreation center.

Chairman John Welch clarified that the sales tax increase would be a quarter of a percent not an increase of a quarter (as in the coin). Welch also said the passing of the resolution doesn’t mean the increase has been passed, just approved to be sent to the Board of Elections to be put on the primary ballot.

“The last time we had a referendum, the waters got muddy,” Welch said. “We want this to be as clear as possible.”

The referendum will allow voters to state whether they are for or against the sales tax increase. It will read, “If passed, the quarter-percent sales tax would reduce the four-cent property tax increase the commissioners already have in place to a two-cent increase,” according to the resolution.

County Manager Deron Geouque said general statutes dictate the wording on the ballot, which is why it doesn’t state the purpose for the increase. However, he said the commissioners could pass a resolution at a later date to address the intent for the increase.

With the four-cent property tax increase enacted in June 2017, Watauga County’s property tax rate sits at $0.353 — the third lowest in the state — according to the resolution. The resolution also states that if voters approve of the quarter-percent sales tax increase, property tax rates will drop to $0.333.

The county would start seeing proceeds from the sales tax increase in October if passed in May.

The board’s opinions on the sales tax increase is split, with Democrats Billy Kennedy and Larry Turnbow opposing the increase and Republicans Perry Yates and Jimmy Hodges in favor.

Kennedy voiced that he’s worried about the long-term viability of the sales tax revenue source.

“There’s been bills the last three or four sessions of the General Assembly to take local enacted sales taxes back to the state treasury and redistribute them as they see fit. With the needs of our school system and needs of our rec center financing, I’m worried they’ll take that money from the successful counties and try to redirect it to other places.”

Turnbow expressed that he opposes the sales tax increase, as it’s the most regressive tax situation. He said people like the elderly, students or those challenged financially would experience this increase with every purchase they made, and it doesn’t benefit them.

Yates disagreed and said the sales tax increase gives the county a chance to take advantage of the tourists that come and use the area’s infrastructure. He said the sales tax increase would help relieve the burden on property owners.

“Sales tax is the most fair tax you can do because it’s everybody equally,” Yates said.

Geouque said the commissioners would be able to approve of a 2018-19 fiscal year budget that would reflect the sales tax increase if approved. The commissioners will have their annual budget retreat Feb. 19 and 21.

Kennedy said there was a meeting with the recreation center architects last week, and the board will receive a schematic drawing of the structure at the budget retreat.

The commissioners also voted to approve a one-time allocation of $25,000 to the Appalachian Theatre from the Economic Development Commission.

Planning and Inspections Director Joe Furman said the EDC was directed by the board of commissioners to consider the theatre’s previous request for $100,000 annually for 10 years. Furman said the EDC quickly decided the 10-year commitment wasn’t something they would consider as it’s a multi-year commitment. However, he said the group would be willing to consider future requests.

The group decided on the $25,000 funding, deciding that the theatre is a viable economic development project and likely would benefit the county’s economy, Furman said.

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