NC bill changes formula for counties receiving state-wide sales tax revenue

HILLSBOROUGH, N.C. (WNCN) — Some counties in North Carolina could lose millions of dollars in tax revenue, while others could gain revenue in at least the hundreds of thousands of dollars – if a bill passes and becomes law.

Senate Bill 126 would redistribute some of the money local counties get from a state-wide sales tax that’s based on population.

Senate Majority Leader Harry Brown, who represents Onslow and Jones counties, is the primary sponsor of the bill and said it updates an old formula the state used to distribute the money.

“In most cases, it will give them a little bit more sales tax, not a lot, but it will give them a little bit more. And, in most cases, those counties could use any help,” Brown said.

CBS North Carolina reached out to local counties about the possible impact.

Of the responses received:

Cumberland County expects an additional $800,000 a year.

Chatham County estimates a loss of around $424,000.

Durham County and the City of Durham combined would stand to lose an estimated $5 million, officials said.

Harnett County estimates an additional $30,000 a month.

Nash County expects more revenue, but has not done any specific analysis about exactly how much more.

Johnston County does not have estimates about the impact at this point.

Sampson County’s financial director estimates a loss of roughly $180,000.

Wake County estimates $4 million dollars in losses.

Orange County estimates a loss of between $1.7 million and $2.1 million, which is about 1 percent of the county’s $212 million budget.

“It would create some uncertainty for the manager and the commissioners just as far as how much revenue is going to be available and whether or not they would need to look at cutting services to make up for this lost revenue or potentially increasing the property tax to make up for it,” said Todd McGee, community relations director for Orange County.

Brown said that the new tax formula would fix a problem.

“Orange County is one of those counties that’s been getting a windfall and this really just corrects that windfall that should have been corrected many years ago. So, they’ve been very fortunate,” Brown said.

Thirty percent of revenues that counties get from the particular tax currently, and also under the proposed bill, must go to public schools.

Lindsley Bowen, who owns Carlisle and Linny Vintage Jewelry in downtown Hillsborough, said she has mixed feelings about the bill’s impact.

“I’d love to see our lesser counties do better, especially education and business-wise, but in terms of my business having been here three years and I started a local business to help our local tax base, it’s a little strange to see our money going to someone else,” Bowen said.

If the bill passes, it goes into effect July 1.

A similar bill was filed last year.

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