Treasurer’s Office says it did not recommend county’s change to ad valorem

CORRECTION: A previous version of this article incorrectly stated that Land refused to meet with Covington. Land and Covington did meet, but Land said he would not call a meeting of the county commissioners to discuss the issue of the ad valorem sales tax distribution. The article has been updated to reflect this.

ROCKINGHAM — Prior to the Richmond County Board of Commissioners’ vote April 6 to switch from a per capita to an ad valorem sales tax distribution, County Manager Bryan Land told commissioners that this was move had been “recommended” by the Office of the State Treasurer.

This was false, according to Sharon Edmundson, director of the Fiscal Management Section of the State and Local Government Finance Division of the North Carolina Department of State Treasurer.

“The Department of State Treasurer (DST) staff did not make a recommendation to Richmond County to modify its sales tax distribution method,” read an emailed response to an inquiry by Rockingham City Manager Monty Crump. “DST staff was asked by Mr. Land if the distribution method could be modified; DST staff informed Mr. Land that the option was available to the county, but any decision to modify the distribution method should be made in close consultation with, and with sufficient notice given to, the county’s municipalities.”

Land’s statement to the commissioners at the April 6 meeting in reference to the recommendation came after his initial pitch on the change, and Chairman Kenneth Robinette had asked the other board members if they had any questions. Commissioner Ben Moss said, “I think it’s a great idea. We should’ve done it a long time ago.”

Following Moss’s comment, Land’s full quote was: “It was a recommendation from the folks at the Treasure’s Office … and they really pushed and it’s one of those things that I wasn’t fully aware of….” Part of his statement was inaudible due to the echo in the old courthouse, where the meeting was held to allow for better social distancing between the commissioners and essential staff.

The change was approved with a unanimous vote by the commissioners. The first the municipalities heard that this was being considered was when contacted by the Daily Journal the following day. Since then, mayors and municipal administrators have scrambled to adjust their budgets, as the new fiscal year is nearly upon them, to withstand the projected impact this loss of sales tax revenue will have on them and their constituents.

According to an analysis by the City of Rockingham of figures provided by the state, Norman would lose 100% of its sales taxes levied, or $25,793.61, annually based on their 2018-2019 numbers. Hoffman stands to lose $89,669.28 in sales tax revenue, or 85.84% of what they received in 2018-2019. Dobbins Heights would lose 79.44%, or $120,185.13. Ellerbe would lose 55.61%, or $103,960.90. Hamlet would lose 40.94%, or $475,316.25. Rockingham would lose 36.3%, or $608,778.70, according to the analysis.

“DST staff is well aware of the significant financial impact such a revision would have on the county’s municipalities, and at no time made a recommendation to the county that it take this action,” Edmundson continued.

Hamlet City Councilwoman Abbie Covington said that Land told her that the change to ad valorem was necessary to balance the county’s budget. Land refused to call a meeting with between city officials and the county commissioners, according to Covington.

Land has not responded to repeated requests for comment on why municipalities were not notified and whether he agreed with the above analysis of the impacts on municipalities since April 10. An email to Land Wednesday seeking comment on Edmundson’s statement was not immediately returned and voicemail was left with Land’s office on Wednesday.

Tuesday night, Commissioner Don Bryant told the Town Council and town administrators of Hoffman that the impact on smaller municipalities was not considered. Asked how much consideration was given prior to voting on this change, Bryant said, “Two minutes.”

“I did not understand what I voted on, I’ll be the first to admit it,” said Bryant at the meeting, adding that switching to ad valorem seemed like “the logical thing at the time” of the vote, in part because Land told the commissioners that there are more than 50 other counties in the state who use an ad valorem sales tax distribution.

“I’m sorry that I voted for this,” Bryant said. “All of a sudden we were meeting at the old courthouse (because it allowed for social distancing), it wasn’t the best facilities set up for us. Communication was not good and we were probably all, like everybody else, ready to get out of there and I guess you can say it was shoved in on us.

“I respect Bryan Land 100%, I support him 100%,” Bryant said at the meeting. “I think we all need to share this problem … so I will let him know that I will rescind my vote.”

Rockingham Mayor Steve Morris and Hamlet Bill Bayless dropped off proclamations from all the county’s municipalities, except for Norman, Wednesday morning asking the county to overturn this decision before the deadline of April 30, after which point it could be locked in for 12 months.

Harold Owen, the municipal operations consultant with the North Carolina League of Municipalities for Richmond County, has reached out to the county’s municipal officials to get an accounting of the breakdown between them and the county administration.

Gavin Stone | Daily Journal The Richmond County Board of Commissioners voted unanimously on April 6 to switch to an ad valorem sales tax distribution with no notice to municipalities.

https://www.yourdailyjournal.com/wp-content/uploads/2020/04/web1_AdValorem-8.jpgGavin Stone | Daily Journal The Richmond County Board of Commissioners voted unanimously on April 6 to switch to an ad valorem sales tax distribution with no notice to municipalities.