Among the big policy changes stuffed into the state Senate’s budget is a proposal that could take significant revenue away from urban counties and distribute it to rural counties. The idea has a double drawback: it will hurt counties that are the engines of the state’s economy and won’t significantly help rural areas.
The proposal by Sen. Harry Brown (R-Onslow) would allocate much of the local sales tax money based on population, instead of keeping the money where sales occur. The change would cost urban counties and tourism-heavy counties while boosting the budgets of rural counties.
Brown says the change will help bridge the urban-rural divide. Instead it will aggravate it.
Cities would likely be forced to raise property taxes to make up the tax loss, because those taxes don’t just go into the pockets of urban areas. They go for infrastructure such as roads and utilities that support the retail and employment centers that bring in the tax.
And, in making the cities more able to support that infrastructure, the rural areas around them benefit with jobs for their residents. Adding sales tax dollars for rural counties won’t be enough to offset deeper economic problems caused by a loss of businesses and population and a lack of infrastructure.
Gov. Pat McCrory, a former mayor of Charlotte, is vehemently opposed to Brown’s idea and vows to veto it, along with the rest of the budget, if it is in the budget document that reaches his desk.
“This bill,” the governor said, “will result in a tax increase for millions of hard-working, middle-class families and small business owners throughout North Carolina. Redistribution and hidden tax increases are liberal tax-and-spend principles of the past.”
Those are fighting words for Republicans, who usually use them against Democrats.
Brown would better spend his energy working on programs to bring more jobs to rural areas. He could also help rural areas by supporting the expansion of Medicaid and seeking more money for public schools. Why must his plan to help smaller counties consist of taking from big counties, instead of coming up with investment and job initiatives to help the unemployed and underemployed in rural counties?
Instead, too many in the GOP continue to talk about cutting income taxes for the wealthy and corporations as the mainstay of economic stimulus. The problem is, if you don’t have a job or are underemployed, a tax cut doesn’t help you much.