Sunday, July 21, 2024

Voters nix quarter-cent sales tax increase, county officials regroup on transit initiatives

The public voted against a proposed quarter-cent sales tax referendum that would have brought in millions for transit projects around the city and county. (Port City Daily/File)

NEW HANOVER COUNTY — A minimal sales tax that would have funneled millions into public transportation, enhancing trails and creating more bike and pedestrian needs, failed in Tuesday’s election by 6% of votes.

The quarter-cent transportation sales tax referendum was on the New Hanover County ballot for voters to show support for or against. If passed, it would have increased the sales tax from 7% to 7.25% — or an extra quarter for every $100 spent — but would not have impacted taxes on groceries, gas, or pharmaceutical medicines.

The race remained close as results came in on Election Day, ending with 47,439 voters shunning the increase while 42,003 supported it. Based on precinct data, the votes cast overwhelmingly in favor of the referendum were all clustered in the northwest area of the county, namely downtown and the central business district.

Eleven out of 43 downtown precincts garnered the majority of support. The area’s demographics are roughly 27% Black and split evenly on Democratic and unaffiliated registered voters. 

If passed, the tax was estimated to bring in $140 million over 10 years. It would have broken down to fund $56 million on bike and ped needs, improving safety and connectivity in beach towns and throughout Wilmington. It also would have added core trails in the northern and southern portions of the county and improved crosswalks. 

Another $23 million would have been spent on rail realignment, with the greatest portion of funding, $65 million, going toward public transportation. Funds would be split between county and city, 45% and 55% respectively.

The county stated Wednesday it has plans to continue to fund projects as needed in its annual budget.

“Public transportation connectivity projects like walking trails and bike paths will continue to be a priority for New Hanover County,” county spokesperson Jessica Loeper said. “And, just as they are now, they will be included in upcoming budgets as funding and budget priorities allow.”

Wave recently has gained back financial traction with executive director Marie Parker — hired in December 2020 — restructuring the system after years of losses. Before Parker was hired, the budget had a roughly $1.2-million deficit and was on its way to cutting routes to save funds. 

The organization stabilized in 2020 with help from outside consultants TransPro, funded by the city and county for $226,000. The firm worked with Wave to restructure the organization by proposing a reduction in service.

Currently operating with an $11.5-million budget, Wave is receiving an additional $770,000 over the next five years in supplemental funding from the Bipartisan Infrastructure Law. Additionally, about $12 million in Covid-19 relief funds was allocated to the transportation system in 2020.

Parker told Port City Daily earlier this year, while its budget will remain balanced for the next two years with the influx of funds, a stable revenue source is still needed. She has plans to increase route frequency, improve infrastructure with new benches and shelters at stops and incorporate new technology for rider accessibility.

According to Wave’s May 2022 operating statistics, ridership is still down 45% overall since 2019. 

Wave staff declined Port City Daily’s request for an interview.

The county released in a statement Wednesday it’s committed to working with the board and staff to determine how to pursue additional funding opportunities to achieve its goal.

“Without the dedicated source of continuous revenue that the sales tax could bring, that work will take more time,” the statement explained. “But public transportation connectivity, accessibility and efficiency will continue to remain a priority for the county.”

Commissioners flip-flopped on the quarter-cent sales tax referendum over the course of six months before voting on the measure to go before the public. Chair Julia Olson-Boseman was the sole opposer in March, but by May, she, along with Jonathan Barfield and Bill Rivenbark, were in support. 

Commissioner Rob Zapple was for the move during an ad hoc committee with city leadership in December 2021 but ultimately moved against placing it on the ballot when it came to a vote in May. 

Local leaders expressed during a public comment period ahead of the vote their desire to wait for the economy to cool before taxing residents. Wilmington Chamber of Commerce president and CEO Natalie English was in support of the added funding for transit projects but didn’t feel the timing was right.

“We aren’t saying no; we’re saying no for now,” English said at the meeting. She wanted to work out details and allow for a longer public education period before putting it up for a vote.

She also said an increased tax would further economic vulnerability among individuals already facing rising interest rates and inflation, and worried about the impact it would have on the business community — the chamber’s main support base.

It passed the commissioners vote 3-2, with vice chair Deb Hays and Zapple dissenting.

In an email sent to PCD Wednesday, English said the chamber is on board to help develop plans and educate the community on the benefits of a potential future ballot proposal.

“The chamber is enthusiastically supportive of investments in all the areas proposed to be funded by the quarter cent sales tax and believes the quarter cent sales tax is the right revenue vehicle,” she wrote.

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