CORNELIUS – The idea of a tax increase can sound heavy, with North Carolina already levying the one of highest state gas taxes in the country and the litany of other taxes already coming out of a normal paycheck. But there is room for consideration of a penny tax, or something similar, for the three towns that make up the North Meck Alliance: Cornelius, Davidson and Huntersville.
The North Meck Alliance discussed the topic, on a hypothetical basis at this point, at its Feb. 8 meeting. Members invited York County Pennies for Progress Manager Patrick Hamilton to explain how the penny tax works on his home turf in South Carolina.
Hamilton started off by saying he was from a small town, and as a child, he used to go to Fort Mill with his family to go to the big restaurants, see a movie or buy school clothes. He said that it wasn’t until he was older he realized that his family was spending their income supporting a town they didn’t live in.
As Pennies for Progress manager, Hamilton said he understood that people balk at new taxes. But more than 20 years ago, they began convincing people in York County that a penny tax was a way they could build, widen and expand roads as the population grew.
“At the time, the county had four DOT (Department of Transportation) funded road projects,” Hamilton said. “The county said this isn’t going to work for what the county is going to be like.” So in 1996, they started looking at the penny tax option.
In 1997, the first penny tax referendum passed a vote with 51 percent approval, edging it into existence.
People were concerned about how the money would be used, he said, and wanted to make sure it was spent in the county. Plus, politics weighed heavily in projects, and residents were wary of elected officials steering funds into projects that did not directly benefit them.
A council was formed of just residents who were able to recommend the projects they chose for the money raised to be used for. Once those projects were selected, the money was only allowed to be used for those and had to stay in the county.
“The idea was to keep politics out as much as possible,” Hamilton said.
That first penny tax period generated $114 million in revenue, but it still wasn’t enough to complete $190 million worth of projects. But now, York County had something in its back pocket – leverage. Hamilton explained that the county was able to go to the State Infrastructure Bank with $114 million to prove that they were invested in the projects. They were awarded $44 million to help with those projects, including widening Interstate 77 from four to eight lanes before the early 2000s.
“When you ask me what the best project that’s ever come from Pennies for Progress, the answer is widening I-77,” Hamilton said.
In 2003, the group went back to the citizens and asked them for another referendum. This time, they were met with a 73 percent approval rating and generated another $183 million for projects in just York County.
In 2011, they asked again. And 73 percent of voters acquiesced, surging support for a penny tax designated for set projects in a specific place.
With support from the State Infrastructure Bank and the money from the most recent penny tax that garnered the most money so far, York County has raised just under a billion dollars in two decades.
Could it work in the Lake Norman area?
Cornelius Commissioner Kurt Naas has expressed interest in a penny tax before, but there are some waters to navigate to allow it, including localizing it beyond the county.
“Our specific version would need to be on a municipal basis,” Naas said. “I think we all agree that having Mecklenburg County is the same as having the City of Charlotte.”
Cornelius Commissioner Mike Miltich said he understands many may not want to stomach another penny tax.
“Our needs up here are so great,” Miltich said. “But we may not have to do a whole cent.”
Naas said that he favors a penny tax because bond referendums fall solely on property owners. “This broadens the tax base,” Naas said.
Though no formal action was made following the Feb. 8 presentation, the penny tax topic is likely to come up for future discussion.