RALEIGH — A sales tax redistribution plan that would generate an estimated $1 million in additional annual tax revenue for Robeson County failed to clear the North Carolina House on Wednesday.
The N.C. Competes Act failed in a 111-2 vote, as representatives pumped the brakes on the Senate’s proposal to distribute sales tax revenue by a formula of 50 percent by population and 50 percent by point-of-sale.
“It’s not a black-and-white piece of legislation,” Rep. Charles Graham said. “The more time and discussion we can have on the bill, the better it will be for all of the counties involved. It’s a complex bill that affects a lot of citizens, but I feel we can come out with something that all counties will benefit from.”
The provision will now go to a joint conference committee. Rep. Ken Goodman, whose district includes part of Robeson, was one of two people to vote to keep the measure alive, saying he feels so strongly the sales tax plan would benefit North Carolina that he “wanted to send a message.”
House Bill 117 began as a measure to expand the state’s Job Development Investment Grants program, a tool to attract new jobs. The Senate later added the sales tax redistribution plan, which has been met with criticism by legislators representing urban counties that stand to lose revenue under the plan.
Sales tax revenue in North Carolina is currently distributed 80 percent by point-of-sale and 20 percent by population, favoring urban centers, shopping and vacation destinations.
Sen. Harry Brown had originally proposed flipping that plan, with 75 percent of local sales tax to be distributed by population and 25 percent by point-of-sale.
Under that proposal, Robeson County after a four-year phase-in period would have seen an additional $3 million to $6 million more annually in sales tax revenue. According to County Manager Ricky Harris, Robeson County now gets about $17 million annually.
Sen. Jane Smith, from Lumberton, had been optimistic that the 50-50 plan would be seen as a compromise. She spoke at a an Aug. 12 rally to support the measure, which was attended by about 200 government officials, according to a statement.
Gov. Pat McCrory has said he will veto any legislation that attempts to meet the goal of Brown’s orginal bill.
Sarah Willets can be reached at 910-816-1974 or on Twitter @Sarah_Willets. Staff writers Jaymie Baxley and Bob Shiles contributed to this report.