Macon County voters will have the opportunity to vote on a quarter-cent sales tax increase during this year’s general election in November.
The tax increase, which Macon County Manager Derek Roland estimates would raise roughly $1.7 million in additional yearly revenue, would provide additional funds to assist with ongoing capital improvement needs in the county school system.
Macon County began the planning process for a new high school in Franklin this year, a project that will incur substantial costs in coming years. Macon County Board of Commissioners Chairman Jim Tate said additional funds would need to be found to move forward with the project, and he voiced his support for drawing on the optional sales tax increase rather than adjusting the county’s property tax rate to raise the money.
“The question is how do you pay for it? It’s not a question of whether or not we’re going to do it – we’ve already decided we’re going to do it,” Tate said during the board’s March 8 meeting. “Would you rather pay for it with an increase of property taxes, or would you rather pay for it by letting some of our visitors who pass through this county also help pay for it through a quarter-cent sales tax increase?”
In order to raise the same $1.7 million projected to come from a quarter-cent sales tax increase, Roland said the county would need to raise the ad valorem property tax rate by two cents. By going the sales tax route instead, he said the impact on residents and property owners in particular would be less burdensome.
“There’s a big difference between sales tax and property tax,” Roland said. “Property taxes are assessed on the value of property you own, while sales taxes are generated from monetary transactions. By adding this quarter-of-a-cent local optional sales tax, that helps share the funding burden for these capital projects among non-property owners as well as those traveling to Macon County.”
Compared to a property tax increase, Roland said the sales tax increase would be relatively painless for shoppers in Macon County.
“On a $50 purchase, you’re talking about an increase of 12 cents,” Roland said.
The proposed tax would apply to goods purchased in Macon County, excluding uncooked food and gas.
The capital needs addressed by the proposed tax extend beyond the construction of a new high school. Roland said the school system is looking at updates to facilities at many of the schools in the county, as well as future expansions for athletics and pre-K classrooms in local schools.
While the sales tax increase would not cover all these costs on its own, Roland said it would be an important piece of the puzzle going forward. Looking ahead, he said the projected $1.7 million in revenue the tax would generate if passed could be on the lower end of what the county actually sees coming in.
“With our economy and what we’ve seen in the way of tourism and the way people are traveling to this area, I think this $1.7 million number is conservative,” Roland said. “If sales tax keeps doing what it has, and the tourist industry with the VRBOs and the occupancy rates we’re seeing at hotels here even in the offseason, this could be a real source of revenue that is going to give us a real opportunity to move forward with a lot of these capital projects if it passes.”
The last time Macon County saw an increase to the sales tax rate was in 2003, when the Macon County Board of Commissioners voted to raise the local sales tax a half-cent to a total sales tax rate of 7 percent.
The Macon County Board of Commissioners passed a resolution to include a referendum concerning the proposed sales tax increase on the Nov. 8, 2022, general election ballot during their March 8 meeting.
- By Carter Giegerich/For The Highlander