City council is expected to discuss the pulling of its proposal for a 1 cent sales tax referendum by legislators this week at Tuesday's meeting.
The pulling of the proposed bill comes as the city faces a bleak 2012-2013 fiscal year after theater reserve funds were depleted for the upcoming fiscal year.
“We were anxious but optimistic,” Mayor Emery Doughtie said Friday. “What was disappointing was the reason and rationale.”
Doughtie said the city was only asking lawmakers for permission to have a referendum on the matter so voters could say whether they would want the sales tax.
The mayor is hopeful that artists coming in for next week's Rapids Jam concert will have an opportunity to explore the theater and there will be discussions about the theater at Tuesday's meeting, which begins at 7 p.m. at the Lloyd Andrews City Meeting Hall on Jackson Street.
Regardless of that discussion, Doughtie said it is important for council to begin planning for the 2012-2013 fiscal.
That fiscal year, the mayor said, is when the city will see, “How much that debt costs us.”
Republican lawmakers felt the proposed bill would set a precedent in town's throughout the state which are facing what Roanoke Rapids is facing. “It was disappointing to me,” Doughtie said. “We didn't have any choice in this debt being put on us.”
Doughtie compares the situation the city will be in with the 2012-2013 fiscal year budget to the one the city's school system faced this year.
The mayor said he believed city residents would have supported the sales tax had the bill passed, simply because the alternative would have been a property tax increase. “I could see how much we could plan and provide services.”
The city was considering the sales tax to pay close to $23.4 million in theater debt.
“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,” a draft said.
The letter said 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 said, was the city was requesting a sales tax for just the incorporated limits of its jurisdiction, not the unincorporated areas of Halifax County.
“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 noted 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 was 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.”
