HomeMy WebLinkAboutC.054.93010_0812Mashburn said the county was expected to lose $3.2 million in reimbursements from
the state next year. He said that for many years the county had received reimbursements for
intangible taxes, inventory taxes, homestead exemptions, sales taxes on food stamps, and
beer and wine taxes. Mashburn said the Governor withheld the money last year, but released
it towards the latter part of the year. He said the Governor had withheld the funds this year
and there wasn't much hope they would be returned due to the state facing a $2 billion
shortfall next year.
Commissioner Williams asked what assurance the county had that the state wouldn't
withhold the half -cent sales tax if the resolution was approved.
Mashburn said the General Assembly could go into session and eliminate the
legislation permitting the tax levy, but the Governor could not withhold the sales tax. He
said the Governor could not withhold the current one cent sales tax or the two one-half cent
sales taxes. He said the reimbursements were just "promises" the General Assembly had
made to the counties when legislation eliminated the intangibles taxes, inventory taxes, etc.
Mashburn said the counties had accepted the General Assembly's legislation in "good faith"
thinking the reimbursements would be distributed.
Commissioner Johnson explained to the audience members that the commissioners
felt there was a fiduciary responsibility to maintain the financial viability of the county. He
said the reason the commissioners were even discussing the tax was because state officials
had repeatedly rejected economic forecasts. He said four different economists had predicted
the economy was going to slow down. Johnson said, "The legislature and the Governor's
office continued to predict economic growth in North Carolina of four to four and a half
percent while everyone else said it would be much lower. When the funds didn't materialize,
they simply didn't pay us what they owed to us. People of more liberal persuasion than
myself will argue that the budget shortfall is due to the fact that when the Republicans
dominated the House in Raleigh, they cut corporate and personal income taxes in the mid-
90s. Even the Democratic Secretary of State on Legislative Week in Review said one Sunday
that two years after that, state government revenues were rising at an unprecedented rate.
Why were they? Because they cut the marginal tax rate. Anytime the marginal tax rate is cut
it frees up capital. It puts more money in the hands of the people and it spurs the economy.
The economy was growing at an unprecedented rate. The rate of growth did slow down
when the economy slowed down, but the state people kept on spending money." Mr.
Johnson continued by saying, "Medicaid in the last twenty years has gone up more, per
capita, than 700%. They continually shift the responsibility of paying for Medicaid to the
county level. Last year, the county had to pay well over one million dollars. Conservatively,
we picked up about $1.8 million in new costs that was shifted to us. On budget items that
are directly under the purview of this board and staff, it has been pretty bad." Mr. Johnson
also mentioned that in recent years, the legislature had shifted school utility costs to the
counties. He said that according to his calculations, if the money had been taken from the
time the legislature made the counties start paying utilities -- from that point until
construction began on Lakeshore School, enough money in utilities had been spent to pay for
the school. Johnson said the $1.8 million and the $3.2 million for the school amounted to $5
million that had been shifted to the county.
Commissioner Ray concurred with Mr. Johnson. Ray said she wanted the public to
understand the predicament the county was facing.
Buddy Hemric (opponent of the tax levy resolution) said he was speaking on behalf
of the Iredell Citizens for Integrity organization. He said the group was "always opposed to
any taxes and tax increases." Hemric said many people were unemployed, and this was one
reason why the tax should not be levied. He said there was no guarantee the state would send
the sales tax revenue to the county. He suggested that rather than passing a resolution to
increase taxes, the county should adopt one to sue Governor Easley and the state.
Charles Carter (opponent of the tax levy resolution) said he concurred with
Commissioner Johnson's comments. He said that every time a tax increase occurred the
money was sent somewhere else, and the local people were no better off than before.