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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.