RALEIGH — The state Senate on Tuesday approved 34 to 12 a sales tax distribution bill that, if it becomes law, would boost Robeson County’s share of sales tax revenue by at least $1 million a year, according to Robeson County Manager Ricky Harris.
The bill, sponsored by Sen. Harry Brown, a Republican from Onslow County, calls for sales tax revenue to be distributed to the state’s 100 counties by a formula of 50 percent by population and 50 percent by where the tax revenue is generated.
The goal of the bill is to increase the amount of sales tax that will go to smaller, more economically stressed counties, taking away sales tax from larger urban counties where the economies are more robust.
Under the current system, sales tax revenue is distributed to counties 75 percent by point-of-sale and 25 percent by population. Originally, Brown had proposed a new distribution formula that called for 80 percent of sales tax revenue to be distributed based on county population and 20 percent to be distributed based on point of sale.
“I’m thrilled to see this bill pass the Senate,” Harris said. “It’s not as much as the $6 million to $9 million we would have gotten under the original proposal but at least under the 50-50 plan we will get at least $1 million more a year. That will keep us from having to continue using our fund balance to balance the county budget.”
The county currently gets about $17 million a year in sales tax revenue.
Sen. Jane Smith, a Democrat from Lumberton who voted in favor of the bill, said that while she would have preferred to see Brown’s original bill pass.
“It’s definitely better than nothing,” she said. “But it may not be over yet. It still has to pass in the House.”
The bill is now headed for the House, where it is expected to meet strong opposition from representatives of urban and tourist areas that will lose revenue under the new distribution formula. Gov. Pat McCrory had threatened a veto of Brown’s original proposal.
Robeson County’s representatives in the House have previously told The Robesonian that they will support the bill.
The sales tax change is attached to a Senate bill that includes jobs incentives.
“I’m thrilled that the incentives package has passed,” Smith said “We are finally back in business.”
Smith has said repeatedly over the past few months that the state’s failure to have a strong incentives package for recruiting businesses has slowed job creation.
The Senate bill calls for immediately adding $5 million to the JDIG fund, the state’s top job incentives fund, and direct $20 million a year to the program. Companies that invest at least $500 million and create at least 1,750 jobs will receive more lucrative incentives, and a corporate tax cut that favors companies with extensive property and payroll taxes in the state will be phased in during a three-year period.