Robeson County Manager Ken Windley reviews his table's lunchtime discussions on what the county is trying to accomplish by pursuing one of the local-option revenues. (Photos by Jason King)

Get ready for Round 2

After convincing legislators of the need for revenue options, counties must now do the same with citizens

By Jason King
Assistant Communications Director

County officials had to fight hard to convince the General Assembly that new revenue options were essential if counties were to pay for the new schools, water and sewer capacity, and other infrastructure projects needed due to the state’s unprecedented growth. The passage of the 2007-09 state budget included those options for counties – but not without another fight.

Pasquotank County Manager Randy Keaton and Gaston County Public Information Officer Pam Peacock participated in a panel discussion on what went right and what went wrong in past campaigns for local revenue options.

Voters must approve a new 0.4 percent land transfer tax or quarter-cent sales tax before a county can levy it. And because most citizens aren’t too keen on new taxes, counties face a big challenge in educating them on why the options are so essential to their counties’ futures. Roughly 120 county officials representing 45 counties attended an NCACC seminar Sept. 19 to find out just how to go about doing that.

‘Everything but how to vote’

Kim Gazella, who is working with Chatham County on its public information campaign on the land transfer tax and with Wake County on three bond referenda, said that counties can legitimately use county funds for public education.

“If you’re going to put something on the ballot, I really feel you almost have a stewardship responsibility to tell people … why it’s on the ballot, what the money will be used for, where to vote, when to vote – pretty much anything but tell them how to vote,” she said. “That’s really the line you don’t want to be crossing when you’re doing a public education campaign.”

Counties can, however, enlist the help of community leaders and citizens groups – a move that greatly enhances the chances that a referendum will pass. One of the more important functions of a referendum committee, Gazella said, is to organize a speaker’s bureau that can address the issue in front of key community groups, such as the Parent-Teacher Association, Kiwanis Club, Rotary Club and Chamber of Commerce. Gazella, who served as communications coordinator for Friends of Wake County, a citizens group that advocated successfully for the passage of a record $970 million public school bond referendum in 2006, credited the organization’s speaker’s bureau with making the difference in voters’ decision to pass the bond.

“Those are the times when you can really, in a smaller setting and without the static of television, that you can really connect with people,” she said.

Strong opposition to any new tax is, of course, a given, but Gazella warned county officials not to string themselves out by trying to counter every personal attack that opponents will make public.

“When you have opposition, one of the things they will try to do is divert all of your attention,” she said. “I always try to tell people not to get sidetracked.

Davidson County Chair Fred McClure discusses his county's needs for the revenue option.

“The important thing is to stay on your own message.”

Friends of Wake County found the message that best resonated with voters was “bonds are the best way to pay.” In Wake County’s case, Gazella explained, citizens were upset with the school board. The organization asked citizens not to “take it out on the bonds” because the needs were not going away. Advocacy and public education communications each pointed out that general obligation bonds carry the lowest interest rates and therefore are the least expensive way to borrow funds to pay for the school projects.

Another winning strategy is telling people what the proceeds from the tax will pay for. NCACC Communications Director Todd McGee researched revenue option referenda in other states and found that counties can increase the chances that voters will approve a new tax by specifying which needs would be met with the revenues.

Earmarking projects for the funds already proved successful in Moore County. Just after the Board of Commissioners adopted a resolution prioritizing the capital projects that would be funded through a 0.4 percent land transfer tax, the county’s largest newspaper – The Pilot – ran an editorial Sept. 22 in support of the board’s actions and passage of the Nov. 6 referendum.

How and when to get the word out

An easy way for counties to get educational materials into citizens’ hands is to “piggy back” on what’s already being sent out, Gazella said. These items include property tax bills, utility bills and citizen newsletters, and paychecks and stubs for employees. She also recommended setting up displays and making brochures available in public places, such as libraries.

Gazella said counties should begin laying the groundwork for their campaigns two to three months out, but should really begin to press about six weeks prior to the election.

Pam Peacock, public information officer for Gaston County, said that timing turned out to be a major factor in the county’s half-cent sales tax referendum for economic development in November 2004. Peacock said the county and community action groups began preparations well in advance of the elections, but “we went big public too soon.” The county’s campaign signs, which read “½ cent for jobs,” triggered a response from the opposition just two weeks later.

Wayne County Finance Director Pam Holt discusses some of her county's infrastructure needs as other county officials, including Board of Commissioners Vice Chair Bud Gray and Chair John Bell (far right), listen in.

“Their slogan directly responded to our campaign,” she said. “Their slogan was, ‘people create jobs, not taxes.’ I think we gave them too much time to organize, come up with a slogan that directly responded to ours, print and put up the signs.”

Pasquotank County Manager Randy Keaton, one of the few county officials in North Carolina who have experience with a land transfer tax public education campaign, emphasized the need for counties to launch education initiatives early. Pasquotank is one of six counties that received authority in the mid- to late-1980’s to levy a 1 percent land transfer tax.

“We figured it would just be an easy sell to the citizens to go out and explain the difference in the land transfer tax and the property tax,” he said.

That wasn’t the case, however, and after the referendum failed in its first appearance on the ballot, county officials began meeting with every community group they could think of. On Election Day, Keaton found himself at polling places talking to citizens who had never heard of the tax. The referendum passed – but only “by about 20 votes,” he said.

Keaton also recommended explaining the needs and the alternatives to citizens. He said once farmers and senior citizens understood that the alternative to the land transfer tax was a property tax increase, they supported its passage.

“We explained to them, ‘if you do not sell your home, you will not pay this tax. If you do not sell your land, you will not pay this tax.’”

County officials also came forward with a specific building plan, showing where new schools would be built.

Attendees also heard from the School of Government’s Karl Smith, who provided an overview of new revenue options and how to evaluate them, and the NCACC’s Paul Meyer, who discussed the legal considerations of the revenue options.

PowerPoint presentations from the seminar

Local Option Revenues: Legal Considerations
Presenter: Paul Meyer, NCACC Senior Associate General Counsel

How to Educate Your Citizens About the Need for New Revenues
Presenter: Todd McGee, NCACC Communications Director

New Revenue Options: Your Options and How to Evaluate Them
Presenter: Karl Smith, School of Government

Revenue Option Referenda Case Studies

Jurisdiction: Romeoville, Ill.
Location: About 30 minutes west of Chicago.
Background: Illinois is a home-rule state. Towns with populations greater than 25,000 are “home rule” communities, which gives them additional flexibility when it comes to raising revenue. However, these revenues must be approved by voters via local referendum.
The issue: Growth. Romeoville grew by 74.1 percent from 2000 through 2006, from 21,153 to nearly 37,000 residents, creating significant strain on town infrastructure resources. As a bedroom community for Chicago, many of the newcomers were young families with children. The town did not have enough parks and recreation facilities to meet demand.
The solution: When the town’s population surpassed 25,000 during this growth, it became a home-rule community, giving it broader taxing authority. One of the options that became available to the community was a real estate transfer tax. The town leaders decided to put a 0.35 percent land transfer tax on the November 2004 ballot.
The campaign: The town created two educational brochures with information about the tax that were sent to citizens. The town focused most of its educational campaign on the tax itself (i.e. who pays it, how much would it raise, etc.) and did not specify how the funds would be used.
The result: Citizens overwhelmingly voted the proposal down.
Next step: The town put it back on the ballot in April 2005.
The result: The tax passed by 22 votes.
Why it worked: Community leaders formed a citizens group, People for Parks, to advocate for the passage of the tax. The town specified how the proceeds would be used, with 50 percent dedicated to parks and 50 percent dedicated to open space preservation. The informational materials sent to voters included photos of which parks would be upgraded and information about the benefits of open space preservation.
Lesson learned: The town identified what had become a community value – increasing recreational opportunities for children. A citizens group was formed so that someone would be actively encouraging people to vote to negate the opposition campaign being funded by local realtors.

Jurisdiction: Horry County, S.C.
Location: Along the coast of South Carolina, bordering North Carolina (Myrtle Beach area).
Background: In 1991, the South Carolina General Assembly granted all counties a 1 percent local option sales tax that had to be approved via a referendum. Voters in Horry County rejected it numerous times in the 1990s and early 2000s. In 1997, the South Carolina General Assembly granted all counties authority for an additional 1 percent Capital Projects Sales Tax for capital improvements. Again, it also had to garner voter approval before it could be enacted.
The issue: Roads. Steady population growth was causing significant traffic congestion in many areas, and the county still had hundreds of miles of unpaved roads.
The campaign: Horry County decided to put the Capital Projects Sales Tax on the November 2006 ballot. The county prepared a public information campaign that included a speaker’s bureau consisting of county officials who spoke to various local organizations, information on the county Web site, and a flyer that was distributed to citizens. In addition, a citizens group, Residents for Quality of Life, formed and prepared yard signs and purchased paid media to support the option.
The result: The tax passed with 61 percent of the vote.
Why it worked: The legislation spelled out the kinds of purposes the revenue could be used for and required counties to publish a list of which projects would be funded with the revenue generated by the tax. Previous attempts to enact the general 1 percent local option sales tax that is available to all counties had failed because citizens weren’t sure how the funds would be used. The citizens group, led by the local realtors association, raised a significant amount of money to encourage citizens to support the issue.

Jurisdiction: Lake Forest, Ill.
Location: About 30 minutes south of Chicago.
Background: The home of Lake Forest University, Lake Forest is an upscale residential community with very little retail. The No. 1 industry in Lake Forest is real estate, with an estimated $400 million of real estate changing hands every year even though the population is less than 22,000. In 2005, the media home value was more than $900,000.
The issue: In 2000, the community suffered from extensive flooding caused by inadequate storm sewers. Non-home rule communities in Illinois are limited from increasing property taxes to a formula based on population and inflation or a 5 percent increase – whichever is less. As a result, the community was unable to generate ongoing funds it needed to address its infrastructure problems. Lake Forest wanted to adopt a real estate transfer tax, but because its population is less than 25,000, it was not a home rule community and did not have the authority to do so. The town put a home rule referendum on the November 2004 ballot, and it was approved overwhelmingly by the citizens.
The campaign: After citizens approved the home rule referendum, the town council put the real estate transfer tax on the April 2005 ballot.
The result: The tax failed.
Why it didn’t work: Because the town had linked the real estate transfer tax authority with the home rule referendum in November 2004, many voters thought the town received the authority when the home rule referendum passed. As a result, voter confusion and bad timing – it was spring break at the university – led to a low voter turnout, and the measure failed.
Next step: The town put it back on the ballot for March 2006.
The result: The tax passed overwhelmingly.
Lessons learned: They took their time after the defeat. Community leaders resurrected the citizens group, the YES committee, that had led the campaign on the home rule referendum. In addition, the town council was unanimously and actively behind the effort. Council members were required to speak to groups in their districts about the proposal, and the council adopted a resolution specifying exactly how the funds would be used.

Jurisdiction: Warwick, N.Y.
Location: About one hour north-northwest of Manhattan.
Background: In 2000, residents voted in a referendum to increase their property taxes to fund a $9.5 million bond to purchase development rights of farms and open space properties to help farmers continue farming and to protect the town’s rural way of life.
The issue: Growth. While the town was experiencing a modest population growth of 6.4 percent from 2000 to 2006, according to U.S. Census Bureau figures, the median home value had jumped from $155,700 in 2000 to $314,800 by 2005. Developers were attracted by the escalating land prices and were looking to build multi-home developments.
The solution: In 2005, with the $9.5 million bond fully committed, the state legislature granted the town a 0.75 percent land transfer tax option that had to be approved by a public referendum. The town leaders decided to put it on the November 2006 ballot.
The campaign: The town decided to dedicate the funds to open space preservation, water resources and property tax relief.
The result: The tax passed with 52 percent of the vote.
Why it worked: Community leaders formed a citizens group – the Warwick Smart Growth Alliance – to advocate for the passage of the tax. The group mailed out several informational flyers detailing why the tax was needed and asked citizens to vote in favor of the tax.