1000 x 90

Watauga Commissioners To Discuss Switching Sales Tax Distribution Method, Boone Would Lose $2M In Revenues

By Jesse Wood

March 26, 2013. Watauga County Commissioner Nathan Miller has dug into his tool bag to try to gain some leverage with the Boone Town Council, which in February approved new regulations to multi-family housing units that, according to commissioners, would effectively railroad Templeton Properties’ $19-million offer for the 75-acre, county-owned site at the old Watauga High School.

During one of its two meetings in April, the board of commissioners will discuss and likely take a vote on switching Watauga County’s sales tax distribution method from per capita, which is based on population, to ad valorem, which is based on property values. This change would drastically cut revenues to the Town of Boone. 

N.C. General Statutes grants counties the power to select which one of the two methods is to be used for distributing the local sales tax revenues to municipalities. However, the commissioners must act quickly because, according to state law, a resolution must be adopted by the end of April and sent to Raleigh for the change to take place in the next succeeding fiscal year.

Based on a “straight-up” switch from per capita to ad valorem, Miller said this is how the municipalities and county would be financially impacted, adding that these were “rough” figures:

  • Watauga County would lose $182,000
  • Town of Boone would lose $2 million
  • Town of Beech Mountain would gain $1.1 million
  • Town of Seven Devils would gain $180,000
  • Town of Blowing Rock would gain $834,000

Ideally, Miller said a “hybrid” solution could possibly be executed with the other municipalities exhibiting a surplus so Watauga County doesn’t end up in the red of this potential change. 

“If there is a way to work with the other municipalities that we have a better working relationship with, I’d rather partner with them,” Miller said, referring to the surplus that Beech Mountain, Seven Devils and Blowing Rock would incur through this proposal.

“I work well with the Town of Beech Mountain, with the school board, with Blowing Rock, and I work well with surrounding counties Ashe, Wilkes, Avery and even Alleghany, which is led by Democrats, through all this New River stuff. The only place I seem to have problems working together is with the Town of Boone.”

Miller said the Town of Boone’s decision on the housing regulations devalued the property of the old Watauga High School site by $10 to $11 million, and he said the board of commissioners has reached out to the town of Boone to discuss these situations to no avail.

“It’s also a political tool,” Miller said.

Commissioner Billy Kennedy said information regarding this proposal was initially on the Watauga County Board of Commissioners agenda for its second March meeting held last week, but that it was taken off the agenda.

Kennedy is a Democrat commissioner representing the rural districts of Brushy Fork, Beaverdam and Cove Creek. He said that he hasn’t yet studied the pros and cons and the figures that encompass this potential change.

“I am still thinking about it,” Kennedy said.

But he added, “I think we need to represent everyone in the county. I don’t think we need to change the tax code myself. But we do need to look at what’s out there and not use the tax code as a political tool.”

While the commissioners ponder on the provided facts and figures leading up to the board’s next meetings, the Boone Town Council has already been having discussions in closed session regarding this issue.

Boone Town Council Member Andy Ball said that the Boone Town Council has met twice in closed session to discuss this matter in the past week.

Ball wouldn’t go into specifics, but he did say the closed-session discussions took place “because of the threat of legal action against the Town” that was related to the matter of the tax change.

After the Boone Town Council passed the multi-family housing regulations, commissioners noted that it was researching the possibility of combating the regulations through legal means and also looking at other ways to gain leverage with the Town of Boone.

But on Tuesday afternoon, Miller said the county was “not pursing” any legal action.

“Now, it doesn’t mean we won’t in the future,” Miller said.

With budget season around the corner, a $2 million cut in revenues would be substantial to the Town of Boone, while Beech Mountain and Blowing Rock, in particular, would be licking its chops.

Ball said that he wouldn’t be at liberty to respond any further until the middle of next week, when the Town of Boone is expected to issue an official statement on the matter.