By Jesse Wood
April 4, 2014. The Beech Mountain Town Council will vote on a resolution urging the Watauga County Board of Commissioners to maintain the ad valorem method of distributing the sales tax in Watauga County at its monthly meeting on April 8, according to the meeting’s agenda.
Last April when the Republican-led Watauga County Board of Commissioners decided to reallocate the sales tax to spite the Town of Boone and gain leverage on the old high school property to the tune of roughly $1.7 million in lost revenue, a “hybrid solution” – which is how Chair Nathan Miller initially described it – was hashed out with the other municipalities: Beech Mountain, Seven Devils and Blowing Rock.
Because ad valorem is based on property rather than population, those three municipalities stood to gain revenue with the switch while Boone was holding the short end of the revenue stick. And because the county had to fund more dollars to the fire department districts with the switch, the county had to negotiate a 40/60 split with those three municipalities so Watauga County wouldn’t end up in the red – like Boone – after the re-distribution.
With the 40/60 split, Beech Mountain, Seven Devils and Blowing Rock all agreed to give the county 60 percent of the additional revenues gleaned from the switch and passed non-binding resolutions supporting the ad valorem method and agreeing to return funds to the county.
When this was all discussed before becoming official last spring, Watauga County Finance Director Margaret Pierce noted that Beech Mountain would receive an extra $470,000; Blowing Rock an extra $334,000; and Seven Devils would receive an extra $73,000 – after the percentage split.
Watauga County has until the end of April, pursuant to state law to reverse the method for the upcoming fiscal year.
While Beech Mountain Town Council is likely to approve the current distribution method because it will receive close to half-a-million dollars of extra revenue, the Town of Boone recently adopted a resolution in late March, urging Watauga County to utilize the per capita method.
(Upcoming April agendas for Seven Devils and Blowing Rock town councils haven’t been released yet.)
In the lengthy resolution, the Boone Town Council noted that Boone has historically collected 60 percent of the total sales tax revenues, yet only received 12 percent during the 2013-14 fiscal year because of the switch to ad valorem. It noted that the $1.7 million loss in revenue accounted for 17 percent of the general fund revenues.
In the resolution opposing the current allocation method, Boone Town Council wrote that it “would appreciate not being forced to raise property taxes on Boone residents, each of whom are also Watauga County taxpayers and voters.” In preliminary discussions during budget retreats, the Boone Town Council has discussed raising taxes significantly.
According to the 2010 Census, Boone has a population of 17,122; Blowing Rock has 1,241 residents; Beech Mountain has 320 residents; and Seven Devils has 192 residents. In all, Watauga County has roughly 51,000 citizens
See Beech Mountain agenda here.