HOST PPT

H.O.S.T. SUMMARY 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 Cherokee County where 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 Cherokee County where metro meets the mountains

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

Cherokee County where metro meets the mountains

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HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES • 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

Cherokee County where metro meets the mountains

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HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES HOW WILL IT IMPACT THE AVERAGE HOMEOWNER? The average home value is ~ $160k. Here is an actual example: • • • • • • • •

General M&O Fire Fund Parks Bond School State Total Tax HOST Credit Final Bill

$ 332.72 • If sales within the $ 210.84 county continue at $ 48.45 current levels, this portion will be $1,194.18 eliminated from the homeowner’s tax bill $ 15.03 $1,801.22 • But that homeowner will still contribute ($ 332.72) (with all other buyers) $1,468.50 through the sales tax

Cherokee County where metro meets the mountains

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HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES 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

$35M

$35M

• $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 - January Cherokee County where metro meets the mountains

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HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES Option1 : Continue with General M&O Taxes Only Paid By Property Owners

$16.8M

+

$3.6M

+

14.6M

= $35.0 Million Total

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

$0 M

+

Primary Residences < 5 Acres *

$1M Other Residential

Cherokee County where metro meets the mountains

+

$4M Other Real Property & Businesses

+

$30M Purchasers

= $35.0 Million 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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HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES THE TWO HOST BALLOT QUESTIONS:” SPECIAL ELECTION”

“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. Question 1 asks to approve/deny the addit’l 1 cent ( ) 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 ? ----------------------------------------------------------------------------------

( ) 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 Question 2 asks to approve/deny the addit’l homestead exemption Cherokee County where metro meets the mountains

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