DOBSON — The Surry County Board of Commissioners recently passed a resolution urging state lawmakers to oppose Senate Bill 369.
The resolution passed by commissioners says “all counties will lose control of their financial stability if local taxes become state revenues” if the legislation is passed.
The bill, which is co-sponsored by Senator Shirley Randleman, would restructure the state’s sales tax statutes. In short, it would remove some local taxing authority and convert that authority into a state sales tax. Those tax dollars would then be disbursed to counties on a per capita basis.
The legislation initially had been proposed as a way to more fairly disburse sales tax dollars and seeks to help rural counties, which see many of their residents go to larger counties to make purchases. Under the current system, sales tax generated by those purchases stay in the counties in which the purchases are made.
However, after selling the new legislation as a law that will help rural counties, the bill has met much resistance here in Surry County. Last month the Dobson Town Commissioners also passed a resolution in opposition to the bill, and Dobson Town Manager Josh Smith said he will be traveling to Raliegh with other municipal managers in order to lobby against the passage of the legislation.
Currently, SB369 is sitting in the NC Senate’s Finance Committee. According to Randleman the Senate’s attention has been on passing its version of the state’s operating budget for the upcoming fiscal year. However, she says the bill’s sponsor, Sen. Harry Brown of Onslow, has been working on the bill.
Surry County Commissioner Larry Phillips said that proponents of the bill “had been listening” to his concerns. Phillips added that while the bill may be stuck in committee, he foresees some version of the legislation passing. Phillips believes that in years to come there will be some level of restructuring to the current sales tax system.
Phillips said that one key concern of he and other commissioners is the impact the bill would have on municipalities. The legislation would effectively remove sales taxing authority from Surry County’s four municipalities. That taxing authority would be replaced by a state sales tax.
One key element, as it concerns municipalities, is that in the legislation’s current form no money would be disbursed directly from the state to cities and towns. Instead, according to Phillips all disbursements of sales tax revenue would be sent to counties, and counties would have to further disburse the dollars to their municipalities.
Phillips said that while he has serious concerns regarding the current form of the legislation, he “applauds” lawmakers like Randleman “for getting the conversation started.”
The bill, which was introduced in late March, is dubbed the Sales Tax Fairness Act. “I think it’s important,” said Randleman. When initial statistics were released in conjunction with the bill, Randleman saw that her entire district could be positively impacted as a result of the bill.
However, a number of local officials have questioned the data. While referring to a map released by Brown’s office that showed counties which would receive more sales tax revenue as a result of the legislation highlighted in green, Dobson Town Manager told his board, “almost all the counties are green.” Smith went on to say that it didn’t make any sense that nearly every county, including larger counties such as Forsythe, would benefit from the bill.
For now Randleman says she and her colleagues in the NC Senate are working long hours to iron out the Senate’s version of the state budget. However, she said she and SB 369’s other sponsors will continue to work on the sales tax redistribution plan.