#ncga: Holding tight to that Robin Hood-style of governance

Raleigh is quite impressed with the “tier” method of doling out cash.  For those who don’t know, every county in the state is ranked either 1,2, or 3.  A ranking of 3 means you are among the wealthiest, and a ranking of 1 finds you among the poorest.

Economic development funds are handed out this way.  Current legislation is trying to arrange for school funds to be handed out this way.  Never mind needs-based appropriations.  Never mind common-sense line-item budgeting like most of us do in our households and businesses.    Never mind getting to use the tax money you coughed up.

The tier system can really screw over a place like, say, Moore County.  Southern Pines and Pinehurst are an oasis of wealth within the state’s Sandhills region.  The rest of Moore County features an awful lot of the same economic stress you can find in, say, Hoke, Scotland, Richmond, or Montgomery counties.  Thanks to the wealth contained primarily in Pinehurst and Southern Pines, Moore County gets a 3 ranking that puts it in the same territory as Wake and Mecklenburg counties.   

Some are making the argument that — if people come to your county and spend money — you should be able to hold on to the collected sales tax to address your infrastructure needs.  (Wake County clearly needs more money to deal with schools and roads than, say, Hoke county.  There are many more people there in Wake using said resources.)  Others argue that wealthier counties should pony up to help out the struggling ones.

Here are senator Jerry Tillman and representative Jamie Boles trying to explain it all to some very frustrated Moore County local government leaders: 

A group municipal and county leaders agreed Wednesday during a daylong visit to the N.C. General Assembly in Raleigh that the state’s tier system is hurting Moore County.

[…]

And even more pain could be inflicted if the system is used to determine how local option sales tax revenues are returned to counties and towns, as well as how additional lottery funds for school construction would be doled out under bills now under consideration in the General Assembly.

[…]

“Moore County is being punished for accomplishing and achieving,” said Whispering Pines Mayor Michelle Lexo. “We can’t get grants to grow our infrastructure in some areas of the county. Where is the fairness?”

[…]

Whispering Pines council member Colin Webster said right now Moore County is “an island” surrounded by lower tier counties. He said they tend to get more assistance for infrastructure needed for recruiting new business and industry.

“They are going to these counties because they get the perks,” Webster said. “Moore County is being penalized by the tier system. We made it on our own. That seems to be the inequity in all of this.”

He added that some of the CEOs and plant managers may live in Moore County, but the plants are in other counties.

Southern Pines Town Council member Fred Walden said Moore County is basically “a tier 3 county with tier 1 needs.” 

Besides hamstringing the ability of the county and some of its towns from obtaining grants for utility improvements and other needs, the county stands to lose $800,000 to $1 million if legislation is enacted that uses the tier system in the distribution of local option sales tax revenues.

“That is something we count on in our budget,” Vest said. “It hurts cities as well as counties.”

Southern Pines council member Jim Simeon added, “It is going to be even worse for us.”

Gregory said municipalities and counties are developing budgets for the new fiscal year, which must be adopted by June 30. It could be August or September before the General Assembly completes work on its budget.

“It is the unknown that is also creating problems for us,” he said.

He and County Manager Wayne Vest said some local governments may have to increase property taxes to offset those losses.

State Sen. Jerry Tillman, who represents Moore County, is sponsoring legislation that would take $75 million in excess lottery funds and distribute them to tier 1 and 2 counties for school construction needs. The bill also calls for using lottery funds principal pay raises and bonuses.

“Please remember that Jerry Tillman did not make you a tier 3 county,” he said. “That was done before I got here. I said you ought to be tier 2 like Randolph. I wish you were because you would get a little better shake on all these school construction bills.”

[…] Another bill Tillman has introduced calls for a $1.9 billion statewide bond referendum to fund school construction. Moore County would get slightly more than $8 million, under the proposed legislation.

Allocations are based on enrollment and growth as well as tier status. Low-wealth and small counties would not have to provide a local match. Other counties, such as Moore, would have to provide some matching funds based on its “ability to pay” ranking by the state.

Tillman said the tier 1 and 2 counties don’t have the tax base to support building schools.

“They don’t have the money,” he said. “They can’t afford it. You can’t do a bill that would give Moore County additional funding if you’re not in the right tier status. … If we just changed your tier status, everybody else would want to be moved. They would say how can you take this high per capita income county and make them tier 2? They’ll throw this fairness issue right in my face. “

Several members of the county’s delegation chimed that is unfair to use the tier system to distribute these additional lottery funds. They said it should be distributed the same way all lottery funds are now allocated to school systems, which is based on enrollment.

“You are taking money out of Moore County,” Webster said. “People in Moore County buy lottery tickets. Why are you taking lottery money out of Moore County and giving it to other counties.”

Tillman said doing it that way would give the lion’s share of the $75 million to larger counties such as Wake and Mecklenburg, which have larger tax bases and more means to raise money for school construction, and less for smaller, poorer counties that might need it.

“It is not that simple of a thing,” he said.

Lexo responded that it should be based on enrollment to help counties that are growing meet their needs.

Aberdeen Mayor Robbie Farrell said the lottery was initially intended to build schools, not put roofs on buildings, add walkways and other renovations. He said a lot of schools could be built with the $5 billion the lottery has generated since it was created, but that the legislature has siphoned off some of revenues for other things, including non-education purposes.

“It was voted in with the promise,” Gregory said.

Farrell added, “It has never happened. .. It was bait and switch.”

[…]

Boles has introduced legislation to restore it to the original 40 percent, which would provide more money for that purpose. He said one of the reasons he opposes the lottery in general is because the legislature has used it to supplant its own funding.

“I don’t blame you for not trusting Raleigh,” he said. “We screwed it up. There has been a lot of passing the buck.”

[…]

Tillman acknowledged that the tier system is not ideal for certain things but that there has to be a way to ensure assistance gets to the counties that need it.

“It’s an imperfect system,” he said. “There is not a perfect way to distribute that money. Everyone knows what the tier system is.”

[…]

Pinebluff Town Commissioner Jerry Williams said using county boundaries may not be the best line of demarcation. He said Pinebluff is close to the borders with both Richmond and Scotland counties, which are tier 1.

“You cannot always tell the difference,” he said of the areas. “But it makes a big difference when you try to get assistance. They can get it, we can’t.”