HomeMy WebLinkAboutC.054.93010_0101 (2)MOTION by Commissioner Fortner to adopt the resolution as presented.
Commissioner Johnson said that no matter what decision the board made on the resolution,
the sales tax increase issue was headed for rejection in the N.C. General Assembly. Johnson said
that an article in the Charlotte Observer quoted N.C. House Speaker Jim Black as saying there was
an easy way to raise money on the local level, and that way was to raise property taxes. Black was
also quoted as saying that at some point, people could not turn to the state to take the blame for tax
substantiated by Ron Aycock, the Executive Director for
increases. Johnson said the quotes were
nty Commissioners, at a recent meeting in Statesville. Mr.
the North Carolina Association of Cou
Johnson said he attended the meeting along with Chairman Tice, Commissioner Stewart,
In addition, Johnson said that Senator
Commissioner Bowles, and County Manager Mashburn.
John Kerr, the Co -Chair for the Senate Finance Committee, had said the state could not give up
revenue sources and such a referendum bill would not come out of his committee. Locally, Johnson
said, House Representative Frank Mitchell from Iredell County, said he was aware of Senator Kerr's
opinions and statements regarding the matter.
Johnson continued by saying the state budget was in a deficit, and he had heard that shortage
estimates ranged anywhere between $300 million on up to $600 million. Mr. Johnson mentioned
that Mr. Aycock had said that if legislation were introduced in Raleigh to raise taxes, the General
Assembly would only be expected to balance the state budget and not the various county budgets.
(Any money received by the state would remain in Raleigh.) Johnson said another concern was the
future reliability of sales tax revenues. He said state officials had voiced concerns about e-commerce
and mail-order transactions on sales tax revenues. Commissioner Johnson said several
people/organizations had suggested that states should develop alternative ways to acquire revenue.
Johnson said this had been reported in several recent publications and newspapers. He said under
North Carolina law, that unless the company had a physical presence in the state, the business was
not required to collect taxes on mail order, telephone, or Internet sales. Current state law is written
where it is up to the purchaser to pay the six percent use tax; however, according to the N.C.
Department of Revenue, compliance is minimal.
Mr. Johnson advised that in 1999, N.C. House Bill 163 established the Tax Policy
Commission, and its mission was to "study, examine, and, if necessary, design a realignment of the
state and local tax structure in accordance with a clear consistent tax policy." Johnson said one of
the areas the commission was supposed to review was Internet transactions. He said the state felt
this was a justifiable issue because Congress three years ago passedthe Internet Tax Freedom Act.
This act placed a three-year moratorium on any Internet transactions. Johnson said there were
estimates indicating that per year, North Carolina counties could lose $103.8 million in revenue.
Between 1999 and 2003, counties could lose $264.5 million. He continued by saying that nationally,
counties by 2003 were expected to lose $20 billion. Iredell County, alone, is expected to lose
$3,911,692 in lost revenues of sales taxes between 1999 and 2003. Johnson said that due to this
information, people should have realistic ideas on the future funding from sales taxes.
Johnson said the ability for the citizens to vote on the sales tax increase was compelling, and
this being the case, he offered the following three amendments to the resolution.
1. To delete the clause indicating the one -cent sales tax "would not supplant existing
property tax revenue" (paragraph 1 I of the resolution). Johnson said that with the resolution there
was only one way the property taxes could go in the future, and that was "up."
2. As long as the one -cent sales tax was in effect, that a property tax rate increase could only
occur with a two-thirds vote of the board of commissioners.
3. That during the sales tax imposition term, the money could not be used to service debt.
Fortner referred to amendment number one. She said that ifthe resolution were altered, using
the amendment, that Raleigh would not approve it. She referred to the allegation that property taxes