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NORTH CAROLINA ASSOCIATION OF <br /> COUNTY COMMISSIONERS <br /> <br /> First Draft <br /> <br /> North Carolina Association of County Commissioners <br /> Position Statement on State Reimbursements <br /> In Lieu of Taxes <br /> <br /> Overview <br /> Dqring the past five years, the General Assembly has made a number of <br /> significant changes in state laws affecting the taxing authority of <br /> local governments. These include: <br /> <br /> o Repeal of the intangible tax on bank deposits (1985). <br /> <br /> o Exemption of all business inventories frQm local property taxes <br /> (1987) . <br /> <br /> The Association of County Commissioners was successful in obtaining <br /> annual stat~ reimbursements to replace the local revenues lost as a <br /> result of the two actions mentioned above. These reimbursements are <br /> appropriated each year by the General Asse~bly from the state General <br /> Fund. <br /> <br />The reimbursements for the partial repeal of intangibles taxes and for <br />the exemption of business inventories now amount to approximately $217 <br />million. State reimbursements for other actions which affected the <br />revenue base of local governments (exemption of food stamp purchases <br />from sales taxes and the elderly homestead 9xemption) represent an <br />additional $18 million. The total annual cost of reimbursements to <br />local governments from the State G~neral Fund is approximately $235 <br />million. <br /> <br />Current Situation <br />The Association has had serious reservations about the vulnerability <br />of the rein~ursements since 1987. The Association's current <br />Legislative Goals call for "replacing, where appropriate, state <br />reimbursements that have been provided to offset the loss of revenues <br />resulting from repeal of certain taxes by the General Assembly". <br /> <br />While th~s remains a sound position, we believe it would be <br />inappropriate to accept such a trade-off at this time. Elimination of <br />the reimbursements for the 1990-91 fiscal year essentially would force <br />boards of county commissioners to enact a sales tax increase prior th <br />the 1990 general election. <br /> <br />Further, the Association will strenuously oppose any attempt to <br />eliminate the existing reimbursements dDring the 1990 session. <br /> <br /> -OVER- <br /> <br /> ALBERT COATES LOCAL GOVERNMENT CENTER · 215 NORTH DAWSON STREET <br /> P.O. BOX 1488. RALEIGH. NORTH CAROLINA 27602-1488 · TELEPHONE 919/~2-2893 <br /> <br /> <br />