New Senate bill raises concerns among Carteret Co. officials

BEAUFORT, N.C. (WNCT)–A proposed bill in the N.C. Senate could impact your next visit to our coastal towns.

Senate Bill 126 proposes new adjustment factors for the distribution of a portion of local sales tax revenue to poorer rural counties. Officials within multiple Carteret County municipalities aren’t happy about that.

“Communities that have a significant seasonal population are going to see pretty significant sales tax reductions if the bill is enacted by the General Assembly,” Emerald Isle Town Manager, Frank Rush, said.

Updated numbers show the town stands to lose an estimated $159,000 in revenue annually.

Previous figures estimated it would only lose between $64,000 and $83,000 of its nearly $2 million revenue stream annually.

Rush says the town has a backup plan in case the bill passes the House. That plan includes cutting items from next year’s budget, potentially delaying the purchase of a police vehicle and eliminating a position.

The bill is currently in the House Committee on Rules, Calendar and Operations.

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A proposed bill in the N.C. Senate could impact your next visit to our coastal towns.

Senate Bill 126 proposes new adjustment factors for the distribution of a portion of local sales tax revenue to poorer rural counties. Officials within multiple Carteret County municipalities aren’t happy about that.

“Communities that have a significant seasonal population are going to see pretty significant sales tax reductions if the bill is enacted by the General Assembly,” Emerald Isle Town Manager, Frank Rush, said.

“In Emerald Isle, we go from 4,000 people to 40,000 at the peak of the summer. We don’t get any credit for those seasonal residents.”

According to the Fiscal Research Divison within the N.C. General Assembly, Carteret County alone is expected to lose between $750,000 and $900,000 of revenue if the bill passes.

The bill’s primary sponsor, Sen. Harry Brown (R), said in a statement that “SB 126 repeals the sales tax adjustment factors and instead puts a more sensible plan in place based on a county’s tier designation.”

Brown said the failure of the state to repeal adjustment factors that “changed collection of sales tax on large deliverable items back to point of delivery instead of point of sale created a double windfall for some counties.”

Morehead City Manager David Whitlow says the bill would impact the services each community offers, like local fire departments and road maintenance.

“Our services are for anybody who happens to be in Morehead City for any particular time,” Whitlow said. “So we don’t say to somebody: we’re only going to show up with an ambulance if you live in Morehead City.”

Atlantic Beach Mayor Trace Cooper says if the bill is passed, the town might have to increase property taxes.

“The current bill will result in communities like ours and others in Carteret County having to raise our taxes to replace the sales tax revenue that is being redistributed to other counties,” Cooper said in a statement. “If the Senate feels that these counties need additional support, they should find a statewide revenue source to provide that support instead of passing the buck to local governments.”

According to Sen. Brown, the bill only affects 25% of the sales tax that’s allocated back to the counties on a per capita basis and not the 75% allocated on point of sale.

The affected municipalities are working with state representatives on the issue.

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