Senate, House at odds on tax shift plan

Posted August 12, 2015

Legislative Building

— Despite a rally held Wednesday by Senate leaders to push for House support of their local sales tax redistribution plan, the plan appears to remain one of several key policy proposals on which the two chambers are divided.

The measure, House Bill 117, passed its final vote in the Senate on Tuesday, 36-12.

But House leaders have so far been cool to the proposal to change the formula by which local sales tax dollars are allotted to counties, and Gov. Pat McCrory has told Senate leaders he will veto any such measure.

At a rally in front of the Legislative Building on Wednesday morning, several dozen local leaders from rural areas, invited to Raleigh by Senate leaders, were repeatedly urged to contact their House representatives and the Governor's Office to voice their support for the bill.

Sponsor Sen. Harry Brown, R-Onslow, railed against the 2007 change in the distribution of local tax dollars from 50 percent point of sale and 50 percent per capita to 75 percent point of sale and 25 percent per capita. He said the formula change "helped about 16 counties and hurt 84."

"Over time, the system has gotten, I think, more and more unfair, because those particular areas that benefited in '07 had additional revenues where they could continue to grow, and that’s what you’ve seen across the state in most cases," Brown told rural leaders. "They’ve been able to do more for recruitment, more for infrastructure in their particular counties, while you’ve struggled to just pay teacher supplements."

"I think this is one of the most important bills – if not the most important bill – we’ll see this session," Brown said. "It will help rural North Carolina do some of the things that you’re required to do by state law and give you some additional revenue to make those things happen."

Brown emphasized the need to bring the bill to a House vote before the end of session, a sentiment echoed by Sen. President Pro Tem Phil Berger.

"I’m convinced that, if the House will vote the bill, we’ll get a strong vote there as well," Berger, R-Rockingham, told the group.

Sen. Tommy Tucker, R-Union, dismissed critics who've called the plan "socialist," calling it instead a "tax reclamation plan" that would right what he referred to as the "reverse Robin Hood" change of 2007.

"We took away from the poor and gave to the rich," Tucker told the rally. "We want the urban centers to be powerful. We want them to grow. It’s not us against them. But there’s something inherently fair with 50-50."

Several rural House members, Democrats and Republicans, gathered at the rally to show their support.

However, other local officials opposed to the plan were working the hallways Wednesday, too, albeit more quietly.

Wednesday evening, House Finance Committee Chairman Rep. Jason Saine, R-Lincoln, said the House leadership has not taken an official position on House Bill 117.

However, he added, "The two House senior finance chairs remain opposed to the proposal," referring to himself and Rep. Bill Brawley, R-Mecklenburg, a county that would be hit hard by the proposal.

"At present, it appears that a majority of the House does not support it," Saine said.


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