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 County where metro meets the mountains

HOMESTEAD OPTION SALES TAX (HOST) Cherokee County where metro meets the mountains 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 Cherokee County where metro meets the mountains 3

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 4

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 $1, State $ Total Tax $1, HOST Credit ($ ) Final Bill $1, 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 Cherokee County where metro meets the mountains 5

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 $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 $35M 6

HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES 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 M = $35.0 Million Total Cherokee County where metro meets the mountains $0 M + $1M + $4M + $30M = $35.0 Million Primary 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. 7

HOST – A LOCAL SALES TAX USED TO REDUCE PROPERTY TAXES Cherokee County where metro meets the mountains “ 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 ? ( ) 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” 8 Question 1 asks to approve/deny the addit’l 1 cent Question 2 asks to approve/deny the addit’l homestead exemption