Local officials look at shifty state revenues

Sparta and Alleghany County officials generally agreed Monday that they have little choice in the face of state plans on shifting revenue.

County Manager Don Adams was optimistic, however, that a proposal being considered by the state house would result in more revenue for the county.

The comments came during a joint meeting of the Alleghany County Board of Commissioners and the Sparta Town Council, one of three such meetings scheduled this year in months which have a fifth Monday.

Adams said the tax package, being put forth by the house finance committee as House Bill 1429, calls for eliminating reimbursements to counties and replacing them with a one-half-cent sales tax increase.

"The state is needing money," he said. The reimbursements include those on inventory and intangibles taxes, as well as on gasoline taxes, food stamps and the homestead exemption. Those reimbursements amount to about $270,000 per year for Alleghany County.

The homestead exemption reduces tax valuation for some elderly, low-income property owners.

Adams said if the sales tax increase is enacted, one-half of the additional revenue will be based on point-of-sale, with the other half based on population. Food sales would be excluded. He said state estimates indicate the county would receive about $385,000 as a result.

That number seemed high to Adams. "It probably still would bring in more revenue (than the reimbursements) but not as much as the state projection," he said.

In response to a question from Mayor John H. Miller, County Commission Chairman Ken Richardson said each cent of the property tax rate (per $100 valuation) is equivalent to about $90,000 in revenue.

Referring to the reimbursement amount, Miller then said, "If we don't pass the one-half cent (sales tax), you're going to have to raise taxes three cents."

Adams said the sales tax can be enacted either by resolution or by referendum.

Commissioner Eldon Edwards said, "Point of sales concerns me. What surrounds Alleghany County is ‘superstores.' I'm not sure we're going to come out the way we need to."

"Like anything else, we get the short end of the stick," Miller responded.

Adams then stated, "I feel confident it will be more than 105 percent of what we normally collect, even with those facts."

Miller said of the proposed sales tax revenue, "The way I understand it, that would be our money. They (the state) can't hold it."

"In theory, that's true," answered Adams.

Commissioner Patrick Woodie responded, "It's true until they need it."
 
 

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