Fayetteville/Cumberland County government relationships may get worse before they get better, according to Fayetteville Mayor Nat Robertson, who has said improving relationships has been a major goal of his since taking office in 2013, although his stance on the future distribution of local sales tax proceeds could further strain relationships. Robertson wants to change the method by which local governments have been dividing millions of dollars in revenue over the last 12 years.
“County commissioners are proposing that the current arrangement be extended for another 10 years,” says Chairman Marshall Faircloth. Commissioners and governing boards of the nine local municipalities have agreed to continuing the existing distribution formula — except the City of Fayetteville. Some city council members want to stop sharing sales tax money in areas annexed by the city over the last 20 years.
The city and county agreed in 2003 to split sales tax revenue taken in annexed areas 50/50, if the county continued to use a territorial population calculation method. They’ve done that ever since, but the agreement expires next year and the county has given the city until January 31 to sign off on an extension. Thus far, Robertson has resisted. He wants the county to agree to a five-year plan under which the city would phase out the agreement so Fayetteville would retain all sales tax revenues.
“It’s the city’s money under the law,” he says.
The eight smaller towns would also be affected by whatever decision commissioners make. And legally, the ball’s in their court.
The old saying that “with every loss there’s a gain” and vice versa, comes into play. If the current agreement is not extended, County Manager Amy Cannon estimates the county would lose nearly $8 million in the coming fiscal year. The City of Fayetteville would gain just under $6 million.
Commissioners have an ace up their sleeve, Faircloth noted. State law gives county government the upper hand. The county government have the sole authority to change the method by which sales tax receipts are divided. They could decide to impose what’s known as an ad valorem or tax district formula. The various taxing authorities would receive sales tax proceeds in accordance with their districts. Commissioners tax the entire county, including Fayetteville. Using that method, the county would gain $6 million while Fayetteville would lose nearly $5 million.
“We will start discussing what we’ll do,” Faircloth said, if the city hasn’t reached an agreement by January 31. The county has until April 30 to decide which way to go. Turf aside “This is a community issue,” Cannon says. “This agreement directly impacts all residents regardless of where they reside within the county.”