As the state Legislature plods along, working agonizingly slowly toward passage of an overdue budget, officials in Bladen County and its seven municipalities await a decision on how local sales tax revenue collected by the state will be distributed.
It would have been a revenue windfall for Bladen County if the original proposal had passed. The current proposal, which has passed in the Senate, still is projected to bring double-digit percentage increases in sales tax revenue to each municipality and the county through fiscal year 2019-20.
If … and it’s a big if … the 50 percent population and 50 percent point of sale formula passes the House and is signed by Gov. Pat McCrory as part of the state’s $21.74 billion two-year budget, Bladen County still would benefit financially from the plan.
“I know it will be more money coming to Bladen County, no matter if it goes to schools or the general fund,” said Charles Peterson, who is chairman of the Bladen County commissioners. “I just see that as a positive.
“In Bladen County, most of our sales tax goes to Robeson County, Cumberland County, New Hanover County, and even into South Carolina. We don’t have the hotels, all of the restaurants, shops and things like that to keep our tax dollars in Bladen County. So, I think it’s only fair to send some of it back. I don’t know what percentage, but I think some of it should be coming back.”
How to distribute the money is at the heart of the debate in Raleigh. It began March 23 when the Sales Tax Fairness Act was filed by Senator Majority leader Harry Brown (Jones and Onslow counties) and Brent Jackson (Duplin, Johnston and Sampson), both Republicans, and Democrat Ben Clark (Cumberland and Hoke). The bill, according to reports, would weight distribution of sales tax revenue collected by the state back to the counties based on population instead of the current system weighted more toward point of sale.
The original proposal called for 80 percent distribution based on population and 20 percent based on point of sale. But larger cities and areas that depend on tourism, such as Dare County, balked at the proposal, and McCrory said in July that he would veto the bill if passed.
Earlier this month the Senate passed the 50 percent population/50 percent point of sale distribution proposal as part of the state budget. It’s now in the House as part of budget negotiations.
BLADEN’S TAKE
Under the 50/50 proposal, Bladen County and each municipality would see about an 11 to 13 percent yearly increase in sales tax revenue distributions for four years beginning in fiscal year 2016-17 when compared to current law, based on projections from the N.C. Association of County Commissioners.
For example, Bladen County received $4.883 million in fiscal year 2014-15 and is projected to get $5.098 million in 2015-16. In 2016-17, when, if passed, the new 50/50 sales tax formula would be implemented, Bladen County is projected to receive $6.016 million instead of the projected $5.313 million under current law. In 2019-20, Bladen County is projected to receive $6.558 million under the 50/50 proposal compared to a projected $5.829 million under current law.
Bladenboro, Clarkton, Dublin, East Arcadia, Elizabethtown, Tar Heel and White Lake will see similar percentage increases through 2019-20. Elizabethtown, the county seat, is projected to receive $741,734 in 2016-17 under the 50/50 proposal compared to $658,237 under current law.
However, if the original 80 percent population and 20 percent point of sale plan had been approved, Bladen County’s portion would have been a 60 percent increase compared to current law to nearly $9 million by 2019-20, according to the Fiscal Research Division of the General Assembly. The seven Bladen municipalities would have seen increases of about 25 percent, the report said.
“If some way the state will help us with the equalization of sales tax, and, if there is some way we could pass that quarter-cent sales tax (in Bladen County), we could relieve some of the burden on property owners,” Peterson said. “That quarter-cent sales tax will lower property taxes by two cents (per $100 valuation).”
Peterson said he has sent a letter to McCrory asking him for a chance to discuss the sales tax issues. “Since he’s against the equalization of sale tax, maybe he could help us understand how rural North Carolina is going to grow.” Peterson said he hasn’t heard back from the governor’s office.
QUARTER-CENT SALES TAX
Twice in 2014, Bladen County voters soundly rejected a local quarter-cent sales tax referendum that would have gone to the public school system to help with capital expenses. In the May primary and again in the November general election, voters turned down the measure by nearly a 3-to-1 margin.
“The thing that hurts Bladen County, and I don’t understand it, is this quarter-cent sales tax that we were going to do for schools,” Peterson said. “When Gov. McCrory went in, they let one of the sales tax sunset, and the tax was already there. They gave the county’s the option to pass the quarter-cent sales tax.
“I imagine a lot of counties have passed it, but Bladen County hasn’t passed it. I’ve sent letters to Raleigh to see if they would let the commissioners do it without a referendum, then it would fall strictly on us. The fairest tax there is a sales tax.
“One thing we’re going to do as commissioners (is) the first chance we get is to put that quarter-cent sales tax back on the ballot, we’re going to do it, and we’re going to use it to lower property taxes.
“We just raised property taxes eight cents, but almost four cents of that was more or less a mandate,” Peterson said. “We didn’t have a choice.”
In the meantime, Bladen County and its municipalities await decisions in Raleigh about the distribution of sales tax.
Share on Social Media using Short Link: https://bladencounty.org/?p=22842
About Author
