Government

Cumberland County Commissioners agree not to change sales tax distribution method for two years

By Staff Report, posted 2 years ago

On March 20, 2023, the Cumberland County Board of Commissioners approved an Interlocal Agreement with the county’s municipalities for Sales Tax Distribution. The agreement, which was also approved by all nine municipal boards, maintains the current per capita method of sales tax distribution within the County for the next two years. Starting with FY 2026, the  Board intends to change the sales tax distribution method to ad valorem.

The new agreement provides a transition period for implementing the ad valorem distribution method, extending the current sales tax agreement and distribution method through June 30, 2025, with 100 percent  of growth above FY 2022 actuals going to the County. As part of the agreement, County Commissioners expressed their intent to transition to the ad valorem method of distribution beginning July 1, 2025. This would also coincide with the implementation of the 2025 Property Reappraisal, when an increase in property values could potentially offset the negative impacts of the distribution method change to the municipalities.

The amended Interlocal Sales Tax Agreement has been approved by the County and all nine municipalities, and the County has not voted to change the distribution method to ad valorem. In the upcoming fiscal year (FY 2024), the distribution method will remain per capita with the approved agreement. Under the approved agreement, municipalities would not experience the revenue impacts related to the change in distribution until FY 2026.

Until then, the potential impact for the municipalities would be that they would not realize any additional revenue beyond FY 2022 actuals – and that any growth from that benchmark would go to the County as outlined in the approved agreement.

FY 2022 saw historic growth in sales tax revenue across Cumberland County, North Carolina and the United States. Because the approved agreement is based on this historic growth, as the economy and inflation begin to slow down, there is the possibility that there will be limited, or even negative growth in sales tax revenue above FY 2022 actuals. If that happens, the County would not realize any additional revenue, and the County and the municipalities would share the decline proportionally.

Ico insights

INSIGHTS

SPONSORS' CONTENT

In The Current Issue

Wrapping up nicely: Major construction finishes up on new R & R Brewing location coming soon to downtown Clinton

The building began as an empty shell and after major construction and renovations, the first floor is almost ready for guests. Photo by GFBJ.It has been a busy two years at 104 Fayetteville St. in downtown Clinton for R & R Brewing. Sin


Rich in memories: Rich Farm & Venue offers affordable space with modern amenities for customers to reserve for their special celebrations

Rich Farm & Venue is a 37-acre space with amenities suitable for any occasion such as weddings, birthday parties and more. Photos provided by Rich Farm & Venue. Rich Farm & Venue in the town of Roseboro combines affordable prices and


A novel concept: New bookstore and wine bar coming to downtown Fayetteville

Kellie Artis is the owner of Bound & Vine, a soon-to-open independent bookstore and wine bar. Photo by GFBJ. Bookworms and wine lovers are in for a treat as downtown’s newest tenant prepares to open later this year. Kellie Artis is the