Proposed bills could impact city’s revenue

Thomasville could lose $1.5 million, says Craver
Apr. 17, 2013 @ 06:50 PM

Thomasville City Council approved a resolution Monday night urging the General Assembly to amend a pair of recently proposed bills that could have a negative impact on local revenues.

Council voted 5-1 in favor of a resolution asking lawmakers to tweak Senate Bills 363 and 394, two pieces of legislation that, if passed, would trim approximately $1.5 million from the city's budget next year. The two bills call for the elimination of several local taxes in an effort to broaden the state's sales tax base and reduce personal and corporate income tax rates. 

"Right now, we haven't seen replacement revenues," City Manager Kelly Craver said. "We have some concerns that as the bills are written it would significantly impact our revenues in a negative fashion."

Senate Bill 363 would eliminate franchise fees municipalities levy on power, water and sewer companies. Thomasville collects approximately $1.4 million annually from utility franchise taxes. Under Senate Bill 394, Thomasville would lose about $41,000 a year from privilege license taxes levied on local businesses and another $120,000 annually from beer and wine excise taxes, both of which would be eliminated should the legislation pass.

"These bills in front of the General Assembly, as they currently read, could have a very significant impact on revenues that come to the city such as franchise tax, beer and wine tax," said Craver. "We're asking the General Assembly to look at these bills again to make certain our revenues and other cities' revenues are not harmed by changes in the tax structure."

Councilman Joel Pierce cast the lone dissenting vote, calling the resolution "premature." Pierce said the bills are designed to create lower tax rates in an effort to strengthen the state's economy.

"I've taken a pretty good look at both of the bills," Pierce said. "I think we all want a stronger North Carolina economy. Sometimes, we have to do some things to get there. I also think it does some things I personally like. It makes the business privilege tax at the state level which is a lot fairer than spread out between municipalities. I think that's a good step." 

Craver said losing $1.5 million from the budget could force the city to either dip into its reserve or cut services.

  

Staff Writer Eliot Duke can be reached at 888-3578, or duke@tvilletimes.com.