HC, Ahoskie voters will decide unique issues
Published 12:00 am Friday, November 2, 2007
Hertford County and Ahoskie voters have decisions to make during Tuesday’s (Nov. 6) election.
Those heading to the polls that day will decide the fate of two unique items on the ballot.
Hertford County voters will note a sales tax referendum on the ballot. That measure calls for a 0.25 percent “point of delivery” tax in addition to the sales and use taxes already in place. While the proposed new tax is minimal (if an individual makes a $100 purchase at a local retail outlet, the “extra” tax will amount to 25 cents), it will have a huge impact on Hertford County’s annual budget.
This proposed new tax comes on the heels of the state taking over the Medicaid share now paid by all 100 counties. That phase-out will occur over a three-year period beginning in October of this year.
For Hertford County, that means the state will eventually take over the county’s $2.4 million in annual Medicaid payments. But the phase-out didn’t come without a catch as Hertford County will lose one-cent worth of sales tax, which, according to county officials, can generate as much as $1.85 million annually.
Additionally, the state will switch another half-cent sales tax from per capita to point of collection for local governments, thereby creating a further challenge for local county commissioners to generate funds to operate county services.
With the loss of those funds, state legislators decided to allow local county governments to generate “new” funds through an additional sales tax or a 0.4 percent land transfer tax. Either of those measures must be approved by the voting public prior to being used.
In Hertford County, voter approval for the 0.25 local sales tax is expected to generate $525,000 annually. To generate the same dollars via property taxes would call for a four (.04) cent increase in the tax rate.
Ahoskie voters will decide fate of GO Municipal Bond
Town of Ahoskie officials are planning to proceed with a $15 million upgrade to its wastewater treatment plant. That complete renovation project is geared towards opening the door for economic expansion within town.
What the Ahoskie voters will decide on Tuesday is how high or low the interest rate will be on that wastewater expansion project.
On the Ahoskie ballot will an entry entitled Wastewater Bonds. There, voters will be asked to say “yes” or “no” to authorizing $11,800,000 in general obligation wastewater bonds for financing, in part, the acquisition, construction and equipping of a wastewater system.
Bonds that are backed by the taxing power of a municipality are known as General Obligation or GO Bonds. The issuer raises taxes or fees and sets the money aside to pay back principal and interest to the municipal bond holders.
The interest earned on these bonds is federally tax-free. That tax-free yield is higher when compared to other types of debt investment. The only other type of debt investment that Ahoskie officials are looking at are Revenue Bonds, which do not require voter approval.
“Revenue bonds are less secure and the interest rate is higher,” Ahoskie Town Manager Tony Hammond said. “The GO Bond is our best option, but a GO Bond requires voter approval. Voting in favor of a GO Bond is cheaper in the long run because the interest rate is much lower.”
Without voter approval on the GO Bond, Hammond said the town would have no other choice than to accept the Revenue Bond option.
Hammond also clarified the amount of the GO Bond compared to the total cost of the project.
“This is a 15 million dollar project,” he said. “Some of the funding we have already obtained through various grants and we are still seeking other grant funding to help lower the overall cost. What we are proposing is an $11.8 million bond. What we actually need of that funding source is $9 million, but the $11.8 million gives us some wiggle room because projects of this magnitude never come in at the original price.”
Hammond added that the bond money cannot be used for any project other than wastewater.