Two pieces of proposed legislation–both aimed at redistributing sales tax revenues to benefit the state’s rural counties–threaten to significantly impact the City of Wilmington’s bottom line.
That’s what the city’s legislative affairs liaison Tony McEwen told council members during a work session last week.
N.C. Senate bills 369 and 608, to varying degrees, would move money from more metropolitan areas and tourist draws to struggling counties statewide by distributing sales tax revenue based on population rather than point of sale.
The first of those bills, introduced by Republican Majority Leader Henry Brown of Jacksonville, would make the deepest cuts locally, McEwen said.
“From what I am hearing, New Hanover County is set to lose 23 percent and Wilmington would lose 12.3,” he noted. “And those, I am told, are conservative estimates.”
The bill does attempt to soften the blow, somewhat, to the hardest-hit counties by allowing them to up their sales tax by one quarter of a percent.
New Hanover County’s current sales tax rate is seven percent, with 4.75 percent going to the state.
Bill 608, sponsored by Mecklenburg County Republican Bob Rucho and Republican Bill Rabon of Brunswick County–filed in reaction from urban areas, McEwen said, to 369–would help ease the burden to more thriving counties by raising an additional $66 million through an expansion of the sales tax to some yet-to-be-named services.
City council members balked at both proposals, but McEwen warned it was a possibility for which they should begin preparing.
“This issue is not going away. The General Assembly is hungry for this,” McEwen said. “It’s just a matter of to what extent.”
Council member Kevin O’Grady said it was another instance of “killing the goose that laid the golden egg” by penalizing areas of the state that have made concerted, planned efforts to boost sales tax revenues, both locally and by attracting visitors.
“People come here because we have invested in the infrastructure,” he said, questioning whether a redistribution would allow rural counties to develop into tourist attractions.
“Is there even any plan on how these counties can spend this money, or are we just handing it to them for however they choose to use it?” he added.
McEwen said neither bill addresses spending limitations or requirements within those rural counties that would benefit from the redistribution.
Both Senate bills have been referred to the finance sub-committee for evaluation following passage on first reading. Similar proposed legislation in the House would tackle the lack of revenue for rural counties by allowing all N.C. counties to up their sales tax by one quarter of a percent without going through a bond referendum.
Hilary Snow is a reporter at Port City Daily. Reach her at (910) 772-6341 or firstname.lastname@example.org.