Mecklenburg County considering new quarter-cent sales tax to support the arts. Here’s what you need to know

A majority of the board has indicated it would support a ballot referendum on a new quarter-cent sales tax increase, projected to raise $50 million each year. Roughly half would go to the Arts & Science Council.

Should the initiative make it to this November’s ballot, it would be the second time in the past five years that voters have been asked to consider a new rise in the sales tax.

The issue is likely to dominate the city’s political discussion over the next few weeks. Here’s what you need to know about it.

What is the Mecklenburg County sales tax and where does the money go?

If you buy something within county limits, you will pay a total sales tax of 7.25 percent. That’s the third-highest rate in the state, behind just Durham and Orange counties.

The tax rate is pretty straightforward. If you buy something for $100, you’ll pay a total of $107.25.

The state collects 4.75 percent, and most counties add on another 2 percent. Mecklenburg County has already passed a half-cent (0.5 percent) sales tax used to pay for transit projects, the primary funding source for Charlotte’s light rail projects.

Legislation from 2007 authorizes counties to pass an additional quarter-cent (0.25 percent) sales tax to be used at their discretion. However, voters must approve the new tax.

Most counties in North Carolina have tried to pass this tax, with mixed success. Mecklenburg County is now proposing to increase the tax rate by a quarter-cent to fund several of its priorities.

Where would the new quarter-cent tax money go?

Mecklenburg County commissioners have proposed spreading the money raised by the sales tax increase between arts organizations, teachers and parks.

The largest chunk — just under half, or an expected $24.5 million per year — would go to the Arts & Science Council to support arts and cultural organizations across the county.

The next biggest chunk ($15 million) would go to county-operated parks and greenways, with another $2.5 million spread between the non-Charlotte towns in the county.

Finally, the county would send roughly $8 million more per year to Charlotte-Mecklenburg Schools to supplement teacher salaries.

However, the county would not be bound by this plan if voters approve the sales tax increase.

What is the Arts & Science Council?

The Arts & Science Council is an organization that raises money then distributed through grants to support arts and cultural organizations both large and small.

They also pay for public art installations and advocate for arts and culture more generally.

Major recipients are the Charlotte Ballet, Children’s Theatre of Charlotte, Charlotte Symphony, Discovery Place, Opera Carolina and the Levine Museum of the New South. All received more than half a million dollars. The Mint Museum is another major recipient.

But its reach is broad. The council gave $11,500 to the Gay Men’s Chorus of Charlotte, $5,000 to the Charlotte Dragon Boat Association and $5,550 to Grey Seal Puppets in 2016, for example.

About half of its revenue comes from government grants, with the other half coming from private donations. Overall, though, its income has fallen steadily over the past decade. In 2012, the Arts & Science Council brought in $14.1 million. That compares to about $11.5 million in 2016, according to tax filings.

Council president Robert Bush earns $235,549 per year, according to its most recent nonprofit tax filings.

Why is the Arts & Science Council asking for this $24.5 million per year?

Bush says that funding for arts programs in Charlotte is in jeopardy because their private donations have dropped in recent years.

Companies used to sponsor donation drives among their employees, but such giving has fallen out of favor in corporate America.

What other options do they have?

A sales tax increase could accompany a restructuring of the Arts & Science Council. Options presented to the county include restructuring the council, bringing it within county government, scrapping it in favor of a new, leaner nonprofit, or creating a new entity similar to the Charlotte Regional Visitors Authority.

However, the county commissioners seem to be leaning toward asking voters to approve the sales tax increase.

Who has to approve a sales tax increase?

The proposal has to go through a few steps.

First, the Mecklenburg County Board of Commissioners has to formally approve a ballot referendum, which would officially put the question to voters in November.

Then voters would have to vote to approve the sales tax increase. This is far from a given.

In 2014, Mecklenburg County commissioners pitched a similar quarter-cent sales tax increase that would have sent more money to Charlotte-Mecklenburg Schools, Central Piedmont Community College, the library system and the Arts & Science Council. Voters rejected it by a vote of 61 percent to 39 percent.

What comes next?

On Tuesday, the Mecklenburg County Board of Commissioners is expected to finalize its plan for how the money would be distributed. Then on July 2, the board would vote on whether to put the initiative on this fall’s ballot.

The Arts & Science Council will likely put a significant amount of money behind a campaign to rally support.

And voters will have the ultimate say in November.