Bad news for supporters of a proposed shift in sales tax dollars that would benefit rural counties: The House has appointed opponents of the plan to negotiate with the Senate.
House Bill 117 cleared the House earlier this year as a jobs incentives bill that would add funding to the state’s main program for recruiting large employers. But the Senate tacked on the controversial sales tax plan, which would split revenues between counties where sales occur and a population-based formula.
Because the current system leaves most revenue at the point of sale, some urban and tourism counties would lose money – while rural counties would gain. Senate Majority Leader Harry Brown said the change would fix an unfair system that has rural residents shopping in urban counties and funding others’ services and schools with sales taxes.
The House voted 112-2 last week to reject the bill in its current form. That will require private negotiations between the House and Senate to find common ground.
House Speaker Tim Moore has appointed 17 negotiators, most of whom are opposed to the plan or represent counties that would lose revenue. Only six of the negotiators would see revenue gains throughout their districts, and at least one of them still opposes the change.
Julie White of the Metropolitan Mayors Coalition, which has lobbied against the change, said she’s pleased with the appointments. “I think that everyone on the committee is equally committed to finding a solution that creates winners for everyone,” she said Friday.
Any deal will require the signatures of a majority of the 17 House negotiators, as well as a majority from the Senate. As of Friday, Senate leader Phil Berger hadn’t yet appointed his team.
Some of the House negotiators have strongly criticized the sales tax change and can’t support it in any form. Among their comments:
Rep. Susi Hamilton, a Wilmington Democrat: “The socialistic sales tax redistribution plan is nothing but an effort to divert attention away from the programs that have been taken away from rural areas of the state.”
Rep. Charles Jeter, a Mecklenburg County Republican: “Last night I was reading the Communist Manifesto so I could get a better understanding of redistribution of wealth – so I could be prepared for this bill.”
Rep. Bill Brawley, a Mecklenburg County Republican: “The sales tax distribution has got to come out. We can’t compromise it at any level.”
At least one House Democrat on the negotiating committee, Rep. Ken Goodman of Rockingham, has spoken in favor of the plan. “We cannot have a great state if we leave rural North Carolina behind,” he said recently.