Governor pledges to veto sales tax bill, but override threat remains

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A controversial sales tax plan that would negatively impact Wrightsville Beach and New Hanover County will be vetoed, Gov. Pat McCrory announced Tuesday, though a local official said the threat of a veto override remains.

Wrightsville Beach Mayor Bill Blair said the governor had earlier promised to veto the sales tax bill, which is now part of the state’s budget, but the veto might not hold up if the legislature overrides it.

“I don’t know how it’s going to turn out,” Blair said of a possible veto override.

The proposal, spearheaded by Jacksonville’s Sen. Harry Brown, R-Onslow County, would alter the distribution of sales tax revenues to be based on population, instead of point of sales. Over four years, the distribution would be shifted from the current system, where 75 percent of the revenue stays where the sales tax is collected, to one where only 20 percent of sales tax revenue stays in the county where the sale is made.

New Hanover County, with its heavy reliance on tourism, would be one of the hardest hit by the change, Blair said. The proposal has wide-spread local opposition, he said, as the county generates the most state sales tax revenue despite having one of the smallest populations.

“The burden falls on a very small group of places,” he said. “Our local representation is all against this, as they should be.”

In a statement, McCrory said he would veto the proposal, which has been included in the state’s budget package, a final version of which is still under negotiation between the Senate and House of Representatives. In the statement, McCrory didn’t specify whether he would veto the entire budget package if needed.

“This legislation will decimate our travel and tourism sector, particularly in our mountain and beach communities, shop owners and their employees who depend on tourism for their livelihood,” McCrory stated.

Local officials have already traveled once to Raleigh to lobby state legislators to reject the proposal and Blair said it might be necessary to make another trip to the capital. He said local officials would discuss their options as the budget battle continues.

“Why build more restaurants on Wrightsville Beach if it’s going to cost too much,” Blair said, adding that sales tax revenues go to support the infrastructure to support new development across the county.

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