Critics question tax talk before Holly Springs vote

They say increase was downplayed

June 9, 2012 

akenney@newsobserver.com

The end of budget season has brought a sharpening of talk about a proposed two-cent tax increase. At a meeting on Tuesday, a former Holly Springs Town Council candidate joined the critics who say they didn’t know enough about the town’s plans for new debt and taxes before last November’s election.

“What I am not in agreement with is how the bond was presented to the town of Holly Springs,” said Kenneth Henke, who supported the town’s vote to authorize $20 million of debt and associated taxes.

Information distributed by the town did outline plans for a potential tax increase, but Henke argued that statements by Mayor Pro Tem Tim Sack illustrated voters’ and candidates’ confusion about whether the town planned to raise taxes in order to build new parks.

For proof, Henke pointed to a letter to the editor Sack had written in September.

“The mayor and town council do not want to raise taxes, and we don’t plan on doing so,” wrote Sack, who was the top vote-getter in the recent election. “The town plans on selling bonds over a long period of time and meeting those costs through increased revenues from growth of commercial and residential tax base coming to the town.”

Council supporters of the tax increase argue that they take authority and a mandate from the 60-40 margin approving the new debt in the 2,534-vote contest. But councilwomen Cheri Lee and Linda Hunt Williams, along with Henke and other critics, say voter confusion about the town’s plans undermines the council’s plan to raise taxes by about five percent in order to afford about $9 million of new parks facilities.

Sack said he changed stances on the tax hike as the town’s new budget came into focus. During election season, “I thought myself that we could try to do it out of growth,” Sack said. The need for a tax hike only became obvious as town staff listed the other needs, such as a police station, that will consume the town’s normal revenues, he said.

Mayor Dick Sears said he and other council members couldn’t have been clearer before the election about their plans for taxes because they themselves didn’t know what the town would need to spend its money on in the coming year.

“It would have been nice, but it would have been pretty well impossible (to be more explicit). We weren’t to that stage yet, it had not been defined at that point,” Sears said on Thursday. “We didn’t know whether we wanted to borrow $5 million or $20 million.”

Who knew what?

Town residents had several places to learn about the bond referendum and potential tax increases during election season. While electoral candidates and elected officials said they would try to avoid a tax increase, the town’s public information arm used a website, public meetings and information station to outline the specifics of the proposal, including plans for new taxes.

“The projects we were looking at, the tax rate, was always there,” said Town Manager Carl Dean. “It was always there.”

The front page of the informational website, hsparksbonds.info, gives little information on the tax implications, but a secondary page explains more.

Under the “Frequently Asked Questions” list’s seventh heading, town staff explain that “the phased approach tax increase is estimated at an additional 3.5 cents per $100 valuation.”

The council has since whittled that rate hike to 2 cents, which will fund turf, lights, tennis courts, greenways and fields.

Former candidate Ray Riordan still supports the bonds and associated tax increase, as he did during the election. But in retrospect, he said, the town and its officials could have been clearer about the future during election season.

“I do think that there was a lack of communication about how it was going to be handled,” said Riordan, who took 12 percent of the vote. “I think that’s where they’re running into some trouble – right or wrong, I don’t think people expected it to come this quickly.”

The tax hikes go to a final vote later this month. If passed, Dean said, they’ll help maintain Holly Springs’ quality of life.

“These things have been talked about for ten years,” he said. “The quality of place, you can’t put enough value on that.”

Kenney: 919-460-2608 or twitter.com/KenneyOnCary

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