04/18/2019
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Sen. Majority Leader Harry Brown, a Jacksonville Republican, is proposing a change in sales tax distribution that could be beneficial to smaller rural counties.  Brown represents Craven and Jones counties, a mid size county and a small county.

 
Under the proposal, the shift would be phased in over a three year period, moving from a system weighted toward sending tax revenue back to where the sales are made to a system where the money is distributed on the basis of population.
 
Monday, lawmakers were provided a chart that shows the effect of the change by comparing last year’s distribution to what should happen when the change is fully in place for the fiscal year that ends in June 2019.
 
According to the legislative staff calculations, Jones County, one of the counties Brown represents, would see about $2.7 million in sales tax revenue to the county in 2018-19, up 163 percent from $1 million last year.  Other small counties would see increases of 100 percent and more over that five year span.
 
Durham, Mecklenburg, Buncombe, Watauga and four coastal counties would see decreases in their sales tax revenues.
 
Dare, one of the biggest beneficiary of the current distribution plan would see a 59 percent reduction in 2018-19 compared with last year.
 
Brown’s office provided statistics for the five year effect:
 
* Wake would be about even.
 
* Durham would be down 9 percent
 
* Johnston would be up 43 percent
 
* Mecklenburg would be down 7 percent.
 
The numbers are estimates that include a projected 3.5 percent annual growth rate.
 
The current formula uses a point-of-sale and population formula that also has a “multiplier” applied to certain counties that magnifies what they get.  The proposed ‘Brown’ plan would phase out the multipliers.
 
Brown has suggested the proposal is an effort to reform an antiquated system that has rural residents subsidizing wealthy counties.
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