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Originally published: 2013-04-11 18:46:28
Last modified: 2013-04-12 09:24:30

Commissioners split on tax change

The town councils of Beech Mountain, Blowing Rock and Seven Devils unanimously passed resolutions Tuesday supporting a proposal by certain county commissioners to change the sales tax distribution method.

The towns also agreed to keep only 40 percent of the increased revenue they would receive if the switch occurs, giving the other 60 percent to Watauga County to prevent it from losing money as a result of the change.

The Watauga County Board of Commissioners now has until the end of April to decide whether it wants to ask the Department of Revenue to switch the distribution method. If approved, the town of Boone would likely receive about $2 million less next fiscal year.

But the issue is turning commissioners against one another, with the outnumbered Democrats saying they are frustrated to have been left out of the process.

"The change of the sales tax has not been done in good faith, and it's really more punitive than anything else," said Commissioner John Welch. "... We're rushing this through with backroom negotiations with other municipalities and a whole lot of bluster in the media and on the radio. I cannot support a process like that."

Board of Commissioners Chairman Nathan Miller and Vice Chairman David Blust first mentioned the possible sales tax distribution change publicly in mid-March during interviews with the Watauga Democrat. The matter was not discussed or voted upon by the entire board, according to several commissioners.

The proposal was a response to the Boone Town Council's changes to its multi-family housing regulations, which commissioners said could jeopardize the $18.9 million sale of the former high school property to Templeton Properties.

The possible switch from a per capita distribution to a hybrid ad valorem distribution would provide significantly more money to Beech Mountain, Blowing Rock, Seven Devils and Watauga County.
Boone would lose an estimated $2 million based on 2011-12 sales tax figures, according to Watauga County Finance Director Margaret Pierce.

Under a strict ad valorem distribution, Watauga County would have lost about $182,000. It also would have had to share about 10 percent of its remaining allocation with the rural fire districts, resulting in an estimated net decrease of more than $1 million, Miller said.

Miller said he met with one council member from Beech Mountain, one from Seven Devils and two from Blowing Rock to hash out alternative options.

"The framework's there so that the county does not lose money in the switch," he said. "There's no guarantee that the county will pass it, but the framework is there so it can be passed."

Beech Mountain Town Manager Randy Feierabend said his board talked for only a few minutes about the proposal before approving it Tuesday.

"It means a lot to us," he said. "It will help us a lot, and I think the council was appreciative."

In Blowing Rock, there also was no disagreement about the benefits to the town. Town Manager Scott Hildebran said he believed Blowing Rock would gain at least $200,000 from the switch.

Seven Devils Town Manager Ed Evans said the conversation also was brief among those board members.

"It means more money for the town, if it should go through, and with money being short supply, more money from any source is good," he said.

Miller said he has asked County Manager Deron Geouque to put the matter on Tuesday's Board of Commissioners agenda, and he said he believes he has at least three "aye" votes.

Blust confirmed Thursday that he was "absolutely" in support of the change.

"The ball is in the town of Boone's court - has been the whole time," Blust said. " ... They are the ones that control their destiny."

Commissioner Perry Yates, who is also a Republican, said Wednesday that he planned to share his thoughts at the upcoming meeting but wouldn't discuss them beforehand.

He noted that as a Boone resident, he would be affected either way.

Yates, who is the son-in-law of prospective buyer Phil Templeton, would not comment on whether he considered it a conflict of interest to vote on the sales tax proposal, given that it stemmed from a property deal involving a family member.

"I have stayed completely out of that," he said. "I have nothing to do with that."

Welch, a Democrat who joined the Board of Commissioners in December 2012, said he was unaware that Miller was negotiating with the other towns until he read it in the Watauga Democrat.

Welch said he believed the county was doing a disservice to its residents by not conducting its business in the open and with input from residents. He questioned why, if the matter is so urgent, the board is not working harder to schedule a meeting with the Boone Town Council.

"My name's at the top of that letterhead, too, and at least give me and whoever else is out of the loop a chance to provide some input on it," Welch said.

Welch said the recent activity has made him question the motives behind the issues with the former high school and has made him leery of the county's pending purchase of 199 acres off N.C. 194 North for use as a business park.

Commissioner Billy Kennedy, who is also a Democrat, also expressed concern about the recent actions, saying, "bullying won't solve anything."

"Every county resident I know goes to Boone or through Boone for services every day, so I think we need to be working with Boone rather than against Boone," Kennedy said.

Every commissioner - even those in support of the sales tax distribution change - said he still would be willing to meet with the Town Council to work on the issues surrounding the housing ordinance.

"Even if we pass (the sales tax change) on Tuesday, if the town will meet and if we're able to come to an agreement before the end of April, it can be rescinded," Miller said. "But time is ticking away."