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County’s northern towns oppose sales tax distribution change

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By Brian Slattery

North Brunswick’s five municipalities are sticking together to say no to any change to sales tax distributions.

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Representatives of Leland, Navassa, Belville, Northwest and Sandy Creek met at Leland’s town hall Monday night, with about 60 residents of the five towns also attending, to present a unified front in opposing the county’s distribution review.

“This is important to the town of Leland and I hope it is important to you, as well,” Town Manager David Hollis said as he provided a brief summary of the situation.

Hollis said a resident of Bald Head Island requested a review of the sales tax distribution.

Since 1989 Brunswick County has distributed sales tax revenue by town populations.

Despite the lone request, a sales tax distribution review committee was formed to consider the option of using ad valorem, or real estate value, to distribute sales tax or determine if a hybrid method — splitting the distribution between population and real estate — would be more beneficial to Brunswick County and its 19 municipalities.

 

Gains, losses

Hollis said any change from the per capita sales tax distribution method will hit not only Leland, but all five North Brunswick towns, with a serious blow to their revenues.

By switching to ad valorem distribution, Leland would lose $1.8 million compared with what the town receives by the population distribution.

Hollis said Navassa would lose more than $225,000; Belville, $320,000; Northwest, $111,000; and Sandy Creek, $38,000.

Then he gave the audience a glimpse at property taxes if each town had to make up the loss of the sales tax.

·      In Leland, taxes on a house valued at $200,000 would jump from $379 to $588.

·      In Navassa, taxes on a house valued at $200,000 would jump from $500 to $953.

·      In Belville, taxes on a house valued at $200,000 would jump from $171 to $534.

·      In Northwest, taxes on a house valued at $200,000 would jump from $550 to $1,059.

·      In Sandy Creek, taxes on a house valued at $200,000 would jump from $750 to $1,374.

Hollis said only five towns would see a benefit from moving away from per capita distribution: Bald Head Island would increase revenues by $1.5 million, Caswell Beach would receive an increase of more than $41,000; Ocean Isle Beach, $362,000, Holden Beach, $209,000 and Oak Island, $178,000.

Hollis broke those numbers down per person. Bald Head Island has a population of 162 permanent residents. The $1.5 million gain equaled $9,446 per person.

Caswell Beach would add $100 each for its population of 413. Ocean Isle Beach’s 575 residents would gain $631 each. Holden Beach would add $356 per person for its 589 residents.

Oak Island has 6,950 residents, so its increase would only be $26 per person. Hollis said through discussions with Oak Island’s administration, they have indicated they don’t favor a change to the ad valorem distribution, even if it puts another $26 per resident in their general fund.

Hollis emphasized that doing away with sales tax distribution by population, even for a per capita-heavy hybrid method, means lost tax revenue for the towns.

“The only way to maintain our status is per capita. No blended methods,” he said.

Hollis proposed the five towns send the message together that District 5 prefers the per capita method by contacting the county commissioners, sending representatives to the next sales tax distribution committee meeting Nov. 6 and getting the word out to civic groups in each of their towns.

 

Speaking out

The sales tax distribution committee’s creation at the behest of one person, former Bald Head Island mayor Larry Lambert, was a sticking point for several people at the meeting.

Leland commissioner Pat Batleman shared the minutes of a Bald Head Island budget workshop meeting from May 7 that showed Lambert proposed to Brunswick County commissioners a blended rate of 80 percent per capita, 20 percent ad valorem sales tax.

Batleman said the minutes show Lambert told commissioners Leland and Oak Island representatives supported a sales tax study.

Batleman also shared an email exchange with District 5 County Commission Frank Williams stating the Leland commissioners are “unhappy one individual possessed the influence to cause so much angst and a lot of money and time to be spent by municipal staff researching and preparing our ‘case’ to be heard.”

“At the time I saw no harm in putting together a committee to look at it,” Williams said.

Williams couldn’t attend the meeting because of a prior engagement, but sent a letter to each town to clarify the county doesn’t have an agenda.

 “To reiterate, at this point all the Board of Commissioners has agreed to do is listen.”

Bob Corston of Leland said the per capita method should remain because the population in northern Brunswick County is permanent, whereas Bald Head Island has chosen to keep its population small and temporary.

Charlie Miller of Leland said he thinks the committee idea was a waste of time and energy by the county.

“It’s totally beyond me how this got legs,” Miller said. “To disrupt the county for one or two towns is ridiculous.”

Isaac Bradshaw, an 18-year-old high school senior, said his family has lived in Leland since his great-grandparents moved there.

“If Leland had to add new taxes I would not be able to live here,” Bradshaw said. “That $1.8 million, that’s jobs, infrastructure repair — to take that away would really hurt us.”

Belville Mayor Mike Allen said each town representative needed to contact not only the sales tax committee members, but also the county commissioners.

“The committee members make a recommendation, but the county (commissioners) vote. They will decide,” Allen said.

He told the audience members they should contact the county, as well.

“Don’t let the 80/20 split fool you. Even if we went to 80 percent per capita, 20 percent ad valorem, (our) municipalities will suffer significantly,” he said.

Northwest Mayor James Knox told the audience the five towns have stood together in the past to sway county policy.

“Our voice makes a big difference,” Knox said. “When we go together, look how effective we can be.”

Sandy Creek Mayor Robert Cruse agreed a change to ad valorem sales tax would be devastating.

“We need every dollar to operate our town,” Cruse said.

Leland commissioner Jon Tait, who was appointed to the sales tax distribution board, said he talked with officials in Onslow County, the only county in the state to use a blended per capita/ad valorem method for sales tax.

“The city manager in Jacksonville said they had to fill a huge hole in their budget. And towns increasing their tax levy to get a larger distribution of sales tax was rampant,” Tait said. “We don’t want to get into that.”

Batleman asked the Leland board create a resolution to send to county commissioners calling for a halt to the sales tax distribution committee review and maintain 100 percent per capita sales tax. Leland’s board unanimously agreed to add the resolution to its Oct. 17 meeting agenda for a vote.

“We invite any other municipality to adopt the same resolution,” Batleman said.

Bozeman provided the audience members with the phone numbers for county commissioners Williams and Pat Sykes tocontact them directly about the issue.

 

Brian Slattery is a staff writer for the Beacon. Reach him at 754-6890 or bslattery@brunswickbeacon.com.