Legislative Update: Chamber advocates for preserving municipal funding

July 1, 2015

The Chamber advocated for preserving current municipal funding levels for Asheville/Buncombe County last week at the North Carolina General Assembly House Finance Committee meeting.
Two weeks ago the Senate rolled out their budget, which included policy to change the method by which sales tax is distributed around the state.  Generally speaking, under current law 80% of sales tax collected from the purchase remains in the county of the point of sale with 20% being distributed around the state on a per-capita basis.
The new Senate proposal would change this formula over four years such that 80% of the collected tax would be distributed around the state on a population basis with 20% remaining at the point of sale.  This would create major problems for all the municipalities of Buncombe County with revenue projected to decrease by more than 10% over five years (since the Senate’s financial projections use the same assumptions state wide, this number could actually be larger depending on what Buncombe’s actual numbers turn out to be).  Due to the county being a regional center for jobs (did you know that only 58% of Buncombe’s workers live in the county?) and the high level of tourism spending, the county experiences high revenue levels relative to its population.  Under the Senate’s proposal, a majority of sales tax revenue collected would leave the county and would thus not be available to pay for needed items such as infrastructure improvements, maintenance and other services needed to support the high number of visitors and workers that the county and city experience. 
During the House Finance Committee meeting, the Chamber was recognized for its participation and support of the House’s desire to have the Senate’s sale tax redistribution proposal removed and other funding mechanisms considered.  The Chamber’s Public Policy department attended the hearing and other meetings with elected officials with the Mayor of Asheville and other City staff. 
The Chamber commends the Senate for working to address funding disparities among North Carolina counties.  However, we encourage them to find a way to better fund the state’s rural areas without devastating the economic engines and job centers of our state.  The Chamber is now working with the other adversely affected areas of the state to build a coalition and encourage the NC General Assembly to find a better way to address funding needs around the state.