ROCKINGHAM — The county’s decision early this week to change the way local sales taxes are allocated isn’t sitting well with at least one municipal leader.
The Richmond County Board of Commissioners on Tuesday voted to switch up the method from per capita, which is based on population, to ad valorem, which is based on property values.
The decision comes as local governments are preparing their budgets for the upcoming year.
Rockingham City Manager Monty Crump said he is “disappointed” there was no discussion or even a heads up that the county had planned to make the change.
Crump sent an email to County Manager Bryan Land Tuesday afternoon asking why the commissioners made the change and what the projected outcome would be.
“This was a Board decision,” Land replied. “The County has been absorbing additional functions from the municipalities over the years, and we thought it would be appropriate if that was recognized in the sales tax distribution.
Land added that it was one of the recommendations from the state Treasurer’s office “in lieu of raising taxes again.”
In 2016, a majority of the commissioners voted to decrease the property tax rate. However, Commissioner Ben Moss, wary of future expenses, warned and voted against the reduction.
Two years later, the county had to raise the rate higher than it had been at the time of the decrease.
Land said in his email that projections show an increase to the county’s coffers of around 10% or $675,000.
“But as you are fully aware with sales being paralyzed for at least the next month no one is sure on future revenue projections,” Land concluded.
“(O)bviously the city is not buying the county’s explanation of absorbing additional services,” Crump told local news outlets in an email Thursday afternoon.
He said using the county’s absorption of the cost of the new 911 Center because Rockingham and Hamlet would not contribute “is an absolute red herring.”
“Rockingham mainly chose not to contribute because the citizens of Rockingham pay county taxes and expecting Rockingham citizens to contribute twice to Richmond County for 911 service with city tax dollars is a double taxation issue and the county commissioners continue to refuse to acknowledge or simply do not understand that,” Crump added.
In his reply to Land, Crump asked which functions, other than the 911 Center, that the county has picked up, then went into how the city opened its recreation programs to out-of-town kids because the county doesn’t have any.
Crump also listed other projects that the city has spearheaded or contributed greatly to and said he fears the “unintended consequences the action may have.
(See Crump’s entire reply attached at the bottom of this article.)
“This decision is a game changer for all Richmond County towns and their taxpayers and not in good way,” Crump said before referencing the county’s financial woes which became apparent in 2018.
A letter from the Local Government Commission “areas of concern” regarding the county’s “financial position, financial operations, and internal controls.”
One issue was the percentage of the county’s available fund balance, which at the time was just less than 16% while other counties in the same population group had an average of 32.23%, according to the letter.
The county was also chided for its over-estimation of ad valorem taxes by more than $500,000.
(See the LGC’s letter at the bottom of this article.)
“The city will deal with this situation and take action accordingly,” Crump told Land. “As a taxpayer and voter it is my opinion it is not effective nor responsible leadership to spread the county’s financial troubles to the county’s municipalities (as) a solution to the county’s financial problems.”
Hamlet Mayor Bill Bayless told the RO Thursday afternoon said they didn’t know anything about it yet.
