One of the most contentious parts of the new Senate budget is a provision that would transfer more sales tax revenue from urban counties to rural ones.
Mecklenburg officials say the county could lose as much as $62 million over five years, potentially triggering a 5 1/2-cent property tax rate hike.
But Mecklenburg, like other counties that would be hit hard by the plan, already sends millions back to the state, according to figures compiled for a coastal lawmaker.
Rep. Paul Tine of Kitty Hawk, the legislature’s only independent, represents tourist-heavy Dare and Currituck counties. They already transfer much of their sales tax revenue for the state for distribution elsewhere. In Dare, nearly 15 percent goes out of the county.
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In Mecklenburg, it’s almost 11 percent, or $30 million in the past year.
The state’s other large counties, Wake, Guilford, Forsyth, New Hanover, Buncombe and Cumberland, also see a net loss of sales tax money. So do Charlotte-area counties such as Catawba, Iredell and Cabarrus.
Under the Senate plan, some counties, including Mecklenburg, could lose even more. That’s because the current distribution formula would change, making counties send even more of the sales taxes they collect to the state.
“There’s a lot of misconceptions about who’s paying their fair share and why,” says Tine. “Let’s truly understand who’s giving and who’s not, and right now who’s giving is Wake, Mecklenburg, New Hanover, Currituck (and) Dare.”
There’s a case to be made to help rural counties, whose economies lag far behind their urban and coastal counterparts. But Tine says the Senate plan isn’t the best way.
“You don’t do it by taking from one county’s local economy’s support system and giving to another,” he says.