Destination towns like Wrightsville Beach thrive in part because of sales tax revenue generated from tourists spending money in local shops. Currently, 75 percent of that revenue returns to the town where the sale was made, paying for services and infrastructure that support the town’s visitors.
That source of revenue for Wrightsville Beach would be greatly reduced should a bill introduced to the N.C. Senate March 24 take effect.
Senate Bill 369, introduced by Sen. Harry Brown, R- Onslow County, would collect and redistribute all sales tax generated statewide based on a city or town’s population size rather than where the sale was made. Counties with relatively low year-round populations and high sales would lose money while rural counties benefit.
The theory behind Brown’s bill is to lessen the trend of urban counties thriving while rural counties struggle, Wilmington Mayor Bill Saffo said during an April 2 press conference at the Wilmington Fire Department’s Military Cutoff fire station.
“I am not opposed to Senator Brown’s aspirations … but this is the wrong proposal,” he added. “What we cannot do is a plan that creates winners and losers and pits one community… against another.”
Saffo was joined at the press conference by Wrightsville Beach Mayor Bill Blair, Carolina Beach Mayor Dan Wilcox, Kure Beach Mayor Dean Lambeth and New Hanover County Board of Commissioners Chairman Jonathan Barfield Jr.
The local leaders took turns voicing opposition to the bill. The beach towns, the city and the county would all lose revenue should the bill become law. In 2019, the year the bill proposed the law would be fully implemented, Wrightsville Beach would lose $834,900.
“If you are a high producer… and we produce a lot, they want to take away from the producers and give it to the rural communities,” Blair said after the conference.
To make up the lost revenue, both Blair and town manager Tim Owens said the town would be forced to raise property taxes or cut its budget. Without taking into account county tax increases to fund various bonds, Blair said Senate Bill 369 would likely force him to raise property taxes 25 percent. That would mean an increase of $300 annually for a $1 million home.
“Every little bit counts,” Owens said during an April 2 phone interview. “$300 is a car payment.”
Blair said that kind of increase in property tax would hurt the town’s housing market.
“Why would you want to buy a house on Wrightsville Beach and pay double your property taxes than you were the year before?” he asked.
In addition to discouraging potential property owners, Blair said the bill could impact commercial development because the town is less motivated to bring businesses to the beach if it doesn’t get to keep most of the sales tax those shops generate.
He said he is loath to raise taxes after having just raised parking fees, but the other option would be severely cutting the town’s budget.
“It could hurt … things that we provide to the community,” Owens said. “It could hurt the police department, the fire department.”
If that happens, Blair said, the town would look very different.
“We can’t be a beach community with that kind of loss of services,” he said.
During the press conference, Barfield, flanked by the mayors, said the county sent a letter to its representatives in the N.C. General Assembly stating its opposition to the bill.
“We stand united in saying ‘no’ to Senate Bill 369,” Barfield said.
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