McCrory threatens veto of sales tax redistribution plan
Published 12:10 am Wednesday, July 22, 2015
Before it could pass the House or Senate, Gov. Pat McCrory on Tuesday declared his intent to veto a measure that would redistribute sales tax across North Carolina.
McCrory has criticized the plan previously, but his formal declaration came hours after Senate Majority Leader Harry Brown, who proposed the plan, held a press conference in Raleigh with government leaders from rural counties to rally support.
Brown’s plan was originally proposed in March as a part of its own bill. It was later added to the Senate’s budget proposal. At the core of the sales tax redistribution plan is an effort to create a level playing field between rural and metropolitan North Carolina. It bases sales tax distribution more on where North Carolina residents live rather than where they shop.
Metro areas, such as Mecklenburg County, have criticized the tax redistribution plan as stripping millions per year from annual budgets. Typical tourism destinations — the mountains and beaches — would also see large drops in sales tax revenue. Estimates contained in the Senate’s budget proposal show Rowan gaining about $8.5 million per year in sales tax revenue in four years.
In a lengthy statement explaining his intent to veto the measure in the budget or its own bill, McCrory said Brown’s proposal should be renamed the“Tax Increase, Redistribution and Spending Act.”
“Redistribution and hidden tax increases are liberal tax and spend principles of the past that simply don’t work,” McCrory said. “More importantly, this bill will cripple the economic and trade centers of our state that power our economy.”
McCrory continued, saying the best thing for rural economies would be his nearly $3 billion Connect NC bond and NC Competes jobs incentive proposals. The bond proposal would build roads, improve colleges, parks and build infrastructure, he said in the release. McCrory’s bond package includes $15 million for improvements at the N.C. Transportation Museum.
The jobs program would benefit travel and tourism, agriculture and manufacturing, McCrory said.
Like the sales tax redistribution plan, senators seek to move a higher percentage of funds from McCrory’s jobs proposal to rural counties. It hasn’t passed both houses.
“This legislation will decimate our travel and tourism sector, particularly in our mountain and beach communities, shop owners and their employees who depend on tourism for their livelihood,” he said about sales tax redistribution. “Instead of pursuing left-wing ideas that continually fail, it’s time for the General Assembly to get to work on job creation for all North Carolina.”
Brown fired back with his own comments about McCrory’s intent to veto the bill. Brown called the governor’s response tone deaf to the overwhelming support sales tax redistribution has received.
“I can’t figure out if Pat thinks he is the governor of Charlotte or the mayor of North Carolina,” Brown said in his own response.
Rowan County’s leaders have been lukewarm on the proposal. County and municipal governments would both see boosts in tax revenue, but County Commissioners Chairman Greg Edds in a previous interview said he would rather see Rowan’s economy grow naturally.
Contact reporter Josh Bergeron at 704-797-4246.