On the November 6, 2012 Ballot, Cherokee County voters will be asked to consider a HOST, an additional penny sales tax, which will be used to reduce property

On the November 6, 2012 Ballot, Cherokee County voters will be asked to consider a

HOST, an additional penny sales tax, which will be used to reduce property taxes

H.O.S.T. SUMMARY

Cherokee Countywhere metro meets the mountains

HOMESTEAD OPTION SALES TAX (HOST)


HIGHLIGHTS

* 1 % SALES TAX FOR ELIMINATION OF COUNTY PORTION OF PROPERTY TAX ON CHEROKEE HOMEOWNERS

* EVERY DOLLAR COLLECTED WILL RESULT IN A DOLLAR OF PROPERTY TAX RELIEF

* ESTIMATED 20 % OF SALES TAX DOLLARS FROM NON-CHEROKEE RESIDENTS

* AVERAGE TAX SAVINGS PER CHEROKEE HOUSEHOLD OF $ 100 PER YEAR

= $350 PROPERTY TAX SAVINGS – COUNTY M & O = ($ 250) AVERAGE HOUSEHOLD SALES TAX INCREASE

* NOVEMBER BALLOT “ SPECIAL ELECTION” SECTION: NOTICE TO ELECTORS “ => QUESTION 1 AND QUESTION 2 – BOTH MUST PASS

HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES

WHAT IS IT and WHAT DOES IT DO ?

• Increase sales tax in Cherokee County from 6% to 7% ( only handful are at 6 % )

• Same categories of goods and services as current State and Local Sales Tax

• 100 % of proceeds from the additional 1% used to reduce General M&O property taxes for homeowners in their primary residence up to 5 acres (per state law) – Cities and Unincorporated Cherokee County

• Sales tax is paid by everyone making purchases in Cherokee County

• Thus, reduces burden on property owners by spreading the cost of government services among all purchasers living in and visiting Cherokee County


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• Current value of 1% sales tax is ~ $30 Million per year

• New outlet center to open in mid-2013 will add more than $1 Million annually

• Elimination of tax on auto sales will reduce total in future

• Residents who rent do not pay property taxes

• Seniors will have future reduction ( 100 % exclusion in 2016 ) from State income tax


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HOW WILL IT IMPACT THE AVERAGE HOMEOWNER?The average home value is ~ $160k. Here is an actual example:

• General M&O $ 332.72• Fire Fund $ 210.84• Parks Bond $ 48.45• School $1,194.18• State $ 15.03• Total Tax $1,801.22• HOST Credit ($ 332.72)• Final Bill $1,468.50

• If sales within the county continue at current levels, this portion will be eliminated from the homeowner’s tax bill

• But that homeowner will still contribute (with all other buyers) through the sales tax


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IS THIS GIVING THE COUNTY GOVERNMENT MORE TAX DOLLARS?•No. It is dollar neutral for the government.

•Instead of collecting ~ $35M from property taxes, it is estimated Cherokee County would collect:

• $30M from sales taxes

• $5M from property taxes

• Still $35M in Total

•The County does benefit from:• diversified revenue sources, and • cashflow improves since sales tax is received each month, rather than major

property taxes receipts in December - JanuaryCherokee Countywhere metro meets the mountains

$35M $35M

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Option1 : Continue with General M&O Taxes Only Paid By Property Owners

Option 2: Implement a HOST Tax to Spread Costs Among Everyone Benefitting from General County Services

$16.8M + $3.6M + 14.6M = $35.0 Million Total


$0 M + $1M + $4M + $30M = $35.0 MillionPrimary

Residences < 5 Acres *

Other Residential

Other Real Property & Businesses

Purchasers Total

* The HOST Credit will first be applied to Primary Residences up to 5 acres. If sales taxes are adequate – other properties will then benefit. Option 2 is based on current sales tax collections.

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“NOTICE TO ELECTORS: Unless BOTH the homestead exemption AND the sales and use tax are approved, then neither the exemption nor the sales and use tax shall become effective.

( ) YES Shall a retail homestead option sales and use tax of 1 percent be levied within the special district within Cherokee County for the purposes of funding capital outlay projects and of funding services to

( ) NO replace revenue lost to an additional homestead exemption of up to 100 percent of the assessed value of homesteads from county taxes for county purposes ?

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( ) YES Shall the Act be approved which provides a homestead exemption from Cherokee County ad valorem taxes for county purposes of up to 100 percent as determined from the proceeds generated from the collection of a retail homestead option sales and use tax for residents of Cherokee County?"

( ) NO

THE TWO HOST BALLOT QUESTIONS:” SPECIAL ELECTION”

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Question 1 asks to approve/deny the addit’l 1 cent

Question 2 asks to approve/deny the addit’l homestead exemption

Documents

On the November 6, 2012 Ballot, Cherokee County voters will be asked to consider a HOST, an additional penny sales tax, which will be used to reduce property