Sales tax formulagives short stickto rural counties


Some have argued that the lines that have been drawn in Raleigh are less Republican vs. Democrat and conservative vs. liberal than they are urban vs. rural.

A good example is a fight that is just beginning, but whose ending might already have been written.

Sen. Harry Brown, a Republican from Onslow County, has included in the Senate’s current budget proposal a change in the way that sales tax revenue is returned to counties and municipalities. Brown essentially flip flops the current formula, mostly returning revenue to counties and municipalities based on population instead of point of sale, as it is now done.

Gov. Pat McCrory has said that he would veto any legislation that includes Brown’s model of redistribution. That, naturally, has angered Brown, who said he is yet to hear an explanation why the governor opposes his plan.

Said Brown: “The current system is inequitable. It takes money out of the vast majority of our counties — many of them struggling — and puts it into just a few counties, most of them thriving. Residents of poorer counties are subsidizing schools in richer counties, while their own schools have less funding. And it means there are major obstacles to job creation in rural North Carolina.”

When Bladen County residents travel to Fayetteville to spend their dollars along Skibo Road, the sales tax revenue is mostly returned to Cumberland. The net effect is that shoppers from Bladen County, which is poor, are helping a richer county such as Cumberland with projects that sales tax money can be used for, including building new schools.

One only has to look at the current decline of many Bladen County school buildings and the county’s jail dilemma to understand exactly how added revenue could help.

We find it incredible that money is flowing from poor to rich counties. We believe redistribution based primarily on population is as close to a fair formula as can be found. According to Brown, it would make winners of 83 of the state’s 100 counties, including three of our neighbors — Robeson, Columbus, Sampson.

The counties that would lose revenue, including Mecklenburg, Wake and Cumberland, are better positioned to recoup it elsewhere.

Of course, critics of Brown’s plan can fire back that if residents of poorer counties want tax revenues to benefit their hometown, then they should simply shop in their hometown. A valid point, for sure, but not entirely realistic — for one, try shopping a small town after 6 p.m.

If McCrory doesn’t like Brown’s plan, he should explain why, but not stop there. There is plenty of room for a compromise and McCrory should offer up his own proposal.

Absent that, should McCrory keep his veto promise, then the urban counties will have won yet another skirmish with the rural ones.

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