Towns could lose tax money
Published 9:47 am Thursday, January 28, 2016
County Manager Mike Ruffin expected some backlash. That’s why he invited officials from each of the three Davie towns – Mocksville, Cooleemee and Bermuda Run – to a county commission workshop last week.
County commissioners are expected to vote in April on whether to change the way sales tax revenue is distributed.
Counties have two choices when they receive the tax money from the state: they can distribute it with municipalities on an ad valorem or per capita method.
Changing from the per capita to the ad valorem (value of taxable property) would mean, even with an extra tax coming in next year, that Bermuda Run would receive $224,320 less, Mocksville 274,090 less and Cooleemee, $131,565 less.
The county would receive $1.4 million more.
Ruffin said he invited the towns to be up front and transparent about the county’s plans. The final decision must be made by the county commissioners at their April meeting.
Statewide, about half of the counties use either system, although Ruffin said the trend is to go with the ad valorem method. Yadkin and Iredell counties use the ad valorem method, Davidson, Rowan and Iredell, per capita.
Davie County needs the money, Ruffin said, to pay for vital services that benefit the whole county such as EMS, the sheriff’s department, and the volunteer fire departments, with many having trouble not only recruiting volunteers, but in the ability to borrow for large purchases.
He also said that while Davie County has been spending down its available fund balance (sort of like a savings account), towns in the county continue to increase fund balances. Davie is at 28 percent of its budget in the fund balance, Bermuda Run has 124 percent, Cooleemee 59 percent and Mocksville 123 percent.
Ruffin said he understands the concerns of the towns, and plans to meet with officials of each in the coming weeks.
The county is also considering a fund balance resolution which would keep it at no lower than 25 percent unless there is an emergency, then, steps would have to be taken to restore the 25 percent after the emergency is over.