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Thomasville: Proposed Tax Reform Could Affect City Services

5:50 PM, Apr 25, 2013   |    comments
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Thomasville, NC -- A proposed reform to the North Carolina Tax Code could mean residents paying sales tax on more of the goods and services they buy.

And, according to some Triad municipalities, it doesn't stop there.

Cities and counties would have less revenue sources which would translate into fewer services if Senate Bills 394 and 363 are approved.

If passed the bills would boost business in the state by eliminating some city and county business taxes including franchise, business privilege, excise natural gas and electric taxes. 

"You're eliminating some taxes on businesses and then shuffling some taxes on individual consumers,' said Thomasville City Manager Kelly Craver. 

Craver explains that his city is projected to lose $1.5 million or 7% of its operating budget in the first two years should the bills pass.

"It could affect your police service, your fire service, your sanitation service, your public works services; certainly the condition of your streets," Craven added.

Uncertainty and concern have set in at city hall as local officials try to anticipate the true impact of the two bills.

"Right now we don't know who is going to win in this," said Craver.

The city manager says local leaders are asking lawmakers in Raleigh to take a step back from the proposals - perhaps consider other changes that'll allow local governments to keep their revenue streams.

The Thomasville council passed a resolution 5-1 last week to oppose the reforms.

One council member voted against the measure saying it was premature.

"We're very concerned this could have a very significant effect," Craven said.

As Thomasville did, High Point council members have also passed a resolution opposing S.B. 394 and 363.

The city says they could lose $2.5 million within the first year; and $6.9 million each year after that  - as more of the provisions in the bills come into play.

According to the North Carolina Association of County Commissioners, all 100 counties in the state could gain more than $56 million the first year and then lose more than $12 million dollars each year after that.

However they do concede that state leaders say they will work to find new revenue sources for local governments to replace some of what they could lose.

 

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