Amidst a swirling debate regarding proposals to restructure the sales tax distribution system in North Carolina, Surry County Commissioner Larry Phillips made a presentation to a General Assembly joint legislative caucus on Wednesday.
The political environment in Raleigh was polarized as Phillips made his visit, with Senate Majority Leader Harry Brown and Gov. Pat McCrory scheduling dueling photo sessions with county commissioners who supported their respective stances on Brown’s proposal to change the way sales tax revenues are distributed around the state.
Brown’s latest proposal, which is the result of a number of changes to the Senator’s initial legislation, would distribute revenues from locally-levied sales taxes in a methodology based 50 percent on population and 50 percent on point of sale. Currently sales tax revenue distribution is based 75 percent on point of sale and 25 percent on a county’s population.
The legislation, as it stands now, would equate to about a $500,000 financial benefit to Surry County. Brown and supporters such as Surry County’s Sen. Shirley Randleman have touted the plan as a way to help rural counties that are struggling financially.
Lawmakers and officials from counties such as Dare, Durham and Mecklenburg, which would take up to a $4.5 million financial hit if the legislation is passed, have called the plan “a redistribution of wealth” and a “misguided” approach.
Gov. Pat McCrory has promised to veto the legislation if it makes it to his desk. The debate set the stage for the war of photo opportunities on Wednesday. Phillips was asked to join McCrory’s photo session, but declined saying, “I don’t need a photo op.”
Instead, Phillips accepted an invitation to represent the North Carolina Association of County Commissioners at a joint legislative caucus which is comprised of state lawmakers who were once county commissioners.
Though members of the press are not permitted in caucus meetings, Phillips provided a copy of the remarks he made to the caucus. Phillips first used his time in front of the caucus to deny some accusations about the Association of County Commissioners.
According to Phillips rumors recently swirled about the association’s stance on the proposed sales tax legislation. Accusations were tossed around, originating from an email from Brown’s office, that the Association of County Commissioners had voiced opposition against the bill.
Phillips said that isn’t the case since the bill could benefit many counties represented in the association. Additionally, having reviewed all emails sent by the association, an Association of County Commissioners representative said that his organization had not expressed any opinions regarding Brown’s bill.
The spokesman did say that his organization had created a number of factual statistics sheets reflecting the impact the legislation would have on all of the state’s 100 counties.
“The integrity of the Association of County Commissioners has rested upon a long standing tradition of seeking bipartisan solutions that helps all 100 counties. At no point will we ever compromise the integrity of this organization by discouraging our membership from voicing opinions on issues that affect their citizens,” Phillips told lawmakers.
Phillips, who is ideologically opposed to the sales tax distribution proposals, used the rest of his time to highlight some of his thoughts as to how state lawmakers might help rural counties such as Surry.
Phillips pointed to Surry County’s economic development efforts as an example of how rural communities are struggling to attract new industry. “In my county since 2010 we have had 70 inquiries from the (NC) Department of Commerce, and others that we could not respond to,” Phillips told lawmakers.
Phillips said that most companies looking to find a business location require an existing building be available in which they can operate. According to Phillips, Surry County does not have buildings with high enough ceilings to offer to prospective companies.
Phillips highlighted North Carolina Job Development Investment Grant (JDIG) money as a way counties like Surry could build the structures necessary to attract businesses. According to what Phillips told lawmakers, a re-structure of the JDIG requirements could cost the state budget no additional funds.
Phillips told lawmakers that investment caps and sunset provisions make it impossible for rural counties to compete for JDIG money. According to Phillips and Randleman, 87 percent of JDIG funds went to the state’s three most populated counties last year. Phillips said that thresholds in the criteria for JDIGs should be lowered in order to allow rural counties to compete.
“A $10 million dollar project with 200 good jobs is just as important to a rural community as a 1,000 job project is to a larger city. Not many rural areas will be able to compete for the larger projects. There is always the exception, but mostly rural areas deal with small to medium sized projects, $2 million to $25 million in investment and less than 500 jobs,” Phillips told lawmakers.
Another area in which Phillips said lawmakers could help is changing how the JDIG’s infrastructure development fund (IDF) revenues can be used. Phillips explained that one quarter of JDIG awards go into a the IDF. Those funds are earmarked to be used for improving access to water, sewer, natural gas and other utilities.
Additionally, IDF monies can only be used by “tier one and two counties,” those counties which are hurting economically. Phillips said that he’d like to see the IDF money be made available for use in capital projects such as constructing the buildings he says Surry County needs to compete in the area of economic development.
Andy Winemiller is a staff writer at the Mount Airy News. Andy can be reached at (336) 415-4698 or email@example.com.