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March 17, 2003 Page 78 Mr. Ron Harwood commented on the quality of County employees and opposed any reduction in the level of services to the citizens of Cabarrus County. Mr. Bob Ritchie of Rocky River Road opposed the one-half cent sales tax. He stated the Board should find ways to cut expenditures as well as look for other ways to create revenue. There was no one else present to address the Board, and Chairman Freeman closed the public hearing at 9:46 p.m. A motion was made by Commissioner Carruth and seconded by Commissioner Carpenter to adopt a "Resolution to Preserve the Current Combined State and Local Government Sales and Use Tax at Six and One-Half Percent". (Resolution set forth below.) There was lengthy discussion by the Board regarding the proposed one- half cent sales tax. Arguments in support of the tax included the following: (1) Scheduled sunset of the State's one-half cent sales tax on July 1; (2) Most equitable solution with everyone paying, including visitors to the County, shoppers at Concord Mills, etc.; (3) Opportunity to add to County revenue without slashing program budgets and without placing a higher tax burden on property owners; (4) Projected shortfall of $5.6 million for FY 2004; (5) Need to maintain the County's Fund Balance at a level of 15 percent; and (6) Need to diversify revenue. Arguments against the sales tax included the following: (1) Previous defeat by County voters of an increase in sales tax; (2) Governor's proposal to retain the State's one-half cent sales tax effective July 1, thus creating a sales tax of seven cents; (3) Need for the County to prove that it has done the best that it can before looking for alternative solutions such as the sales tax increase; (4) Projected improvement in the economy; (5) No plans to cut County programs/ services; (6) Revaluation results in FY 2005; (7) Economic incentives will be ending; and (8) Availability of the County savings (fund balance) of $29 million. Commissioner Privette made a motion, seconded by Vice Chairman Suggs, to amend the Resolution presented by Commissioner Carruth by adding the following at the end of Section 1: "..., provided the revenues generated by the one-half cent sales tax correspondingly reduce the property tax by the same rate." For example, he stated that $4 million in sales tax revenue would result in a reduction of four cents on the property tax rate. Mr. Day pointed out that revenue from the one-half cent sales tax is included in the financial forecast for FY 2004. If the sales tax is not approved, the shortfall for FY 2004 is projected at approximately $10 million. Ms. Dubois advised that the fund balance is $32 million. However, she explained that only $16 million is available if the fund balance is brought down to the eight percent reserve level. After further discussion, Commissioner Carruth moved to call the vote on the amendment as proposed by Commissioner Privette. The motion by Commissioner Privette, seconded by Vice Chairman Suggs, to amend the "Resolution to Preserve the Current Combined State and Local Government Sales and Use Tax at Six and One-Half Percent" by adding "..., provided the revenues generated by one-half cent sales tax will reduce the property tax by the same rate" at the end of Section 1 failed with Commissioner Privette and Vice Chairman Suggs voting for and Chairman Freeman and Commissioners Carpenter and Carruth voting against. UPON MOTION of Commissioner Carruth, seconded by Commissioner Carpenter with Commissioners Carruth and Carpenter and Chairman Freeman voting for and Vice Chairman Suggs and Commissioner Privette voting against, the Board adopted the following Resolution. Resolution No. 2003-07 County of Cabarrus The State of North Carolina March 17, 2003 RESOLUTION TO PRESERVE THE CURRENT COMBINED STATE AND LOCAL GOVERNMENT SALES AND USE TAX AT SIX AND ONE-HALF PERCENT WHEREAS, the General Assembly has authorized the Cabarrus County Board of Commissioners to levy a one-half percent (1/2%) local sales and use tax by