The city is considering a 1 cent sales tax to pay close to $23.4 million in theater debt and council tonight approved a draft letter requesting authorization from state legislators to hold a referendum on the matter.

“The bill, as envisioned by the city, would allow the residents of Roanoke Rapids to vote on a referendum allowing for a 1 cent local sales tax to be charged within our city limits only and to benefit the city alone in order to pay its debt obligations relating to the Roanoke Rapids Theatre,” the draft says.

The letter says while the debt of the theater is $21.5 million, the balance, if paid off early or refinanced is closer to $23.4 million. “The city’s present annual debt for the theater is over $1.7 million or 11.33 percent of our budget. The city wishes to control this debt in a manner that does not place a heavy burden on our local property taxpayers. We believe a sales tax of 1 cent, using the standard exemption to sales tax recognized by state law, is the best way to repay this debt.”

The difference between this request and others, the letter says, is the city is requesting a sales tax for just the incorporated limits of its jurisdiction, not the unincorporated areas of Halifax County. “Although we will need to work together to resolve some collection issues and reimbursement issues with both the county and the state of North Carolina, we are confident with your help that this can be accomplished.

“Also, this is merely a request for authorization to hold a referendum on the question of the local sales tax and, if passed, permission to enact it by the city council. This is not an outright request to apply the tax without first going to our residents for a vote of approval. We believe this is the way to govern ourselves and give us a path to take care of our own debt without asking the state for direct or indirect assistance with repayment.”

The letter notes the city estimates an annual sales tax just in the city limits will produce an annual revenue of $1.7 million to $2.1 million. With the exception of possible administrative fees, the amount projected is close to the annual debt of the theater. “Our request would be to use these proceeds only for theater debt, apply it only until the theater debt is paid in full and then the local sales tax should expire.”

Sabiston told council it is time to take this step. “If we don’t do this, there won’t be much action on it in this General Assembly. Now is the time to submit these and get it passed before the end of this session.”

If the theater should be sold, that should excuse the debt, Sabiston told council.

“We have expressed our concerns to the community,” Mayor Emery Doughtie said. “Basically, we’re limited to how we meet our budget. We want you to come tell us what you would like to do to help Roanoke Rapids.”

Doughtie said last week’s referendum in Halifax County on a quarter cent sales tax sent a message. “The ones that voted sent the message they would rather see an increase in sales taxes than property taxes.”

The mayor said the legislature wants to see council has support from its residents. “This debt is just strangling us.”

Sabiston said following the meeting if the sales tax projections are accurate the debt would be paid in 14 to 15 years.

He said the city continues to look at refinancing options, one being through a general obligation bond, which would have to be approved by a referendum, that would lower the cost by $400,000 to $500,000.

Like the county sales tax, if one is approved in Roanoke Rapids, it would not apply to following:

Groceries or non-prepared foods

Buying vehicles

Buying gasoline

Buying prescription drugs