RALEIGH — A message from the North Carolina Association of County Commissioners applauds a recent change to Senate Bill 369, dubbed the Sales Tax Fairness Act.
According to an email that was sent from the association’s cxecutive director, Kevin Leonard, the bill’s sponsor, Sen. Harry Brown of Onslow, shared a revised version of the legislation with the Association of County Commissioners.
Leonard stated that the legislation will no longer convert a county sales tax to a state sales tax. Leonard stated that the proposal, in its new format, will ensure “counties maintain long-term local control and fiscal security.”
Leonard describes the new form of the legislation as a bill that will expand the tax base and create new revenue. The legislation would also grant counties some new taxing authority by referendum. If the new legislation is passed it will convert the sales tax system in the state to one based 80 percent on population and 20 percent on point of sale over the period of the next five years.
Senate Bill 369 was filed in late March and is co-sponsored by Surry County’s representative in the senate, Sen. Shirley Randleman. The bill was touted by Randleman and others as legislation that would narrow the financial gap between the state’s rural and metropolitan counties.
However, since its release the bill has met stiff opposition from officials who represent counties with larger sales tax revenues such as Mecklenburg County. Officials from those counties would have lost revenue when the legislation converted county and local sales taxes into a state sales tax and distributed dollars on a per capita basis rather than a point of sale distribution.
Sen. Joel Ford, of Mecklenburg County went as far as calling the legislation “short-sighted” and “a redistribution of wealth.”
The proposed sales tax measure met additional opposition from officials representing counties and municipalities throughout the state. Surry County Commissioners, the city of Mount Airy and the town of Dobson all passed resolutions in opposition to SB369.
Those officials were concerned about losing their taxing authority when local and county sales taxes were converted to a state sales tax and distributed by lawmakers in Raleigh. Shortly after the bill was introduced Surry County Commissioner Larry Phillips asked, “Why elect us (county commissioners)? Just have Raleigh appoint us.”
Phillips voiced his concern about funneling more money through the state government. In short, Phillips pointed at lottery funds as an example of promises from Raleigh that weren’t kept. Additionally, Phillips said that in the 2018-19 fiscal year the county’s four municipalities would have lost $1.1 million in revenue if the original version of the legislation were to pass.
Leonard’s message to county commissioners throughout the state thanks them and other local officials for a lobby effort against the original version of the legislation. Leonard states that his organization is “still digesting the revised proposal” of SB369. However, Leonard promised that additional analysis from the Association of County Commissioners will soon follow his initial message.