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County, city tax deal in works?

By Mike Conley | The McDowell News

Published: January 13, 2009

County officials said they want to work out something with the city of Marion about the distribution of sales tax revenue.
"The bottom line is we are trying to figure out a way to transition and adjust," said County Manager Chuck Abernathy.
At Monday's meeting, the McDowell County Commission talked about some of the ongoing issues with the city of Marion. The discussion was a follow up to November's joint meeting between the Marion City Council and the County Commission where they talked about the county's new method of distributing sales tax revenue.
In April, the commissioners adopted a different method of distributing sales tax money. The county decided to change from a per capita method (based on population) to the ad valorum method (based on tax levy) due to the fact that the latter financially favors the county. County officials said they have lost sales tax money because of recent annexations by the city, including the annexation of the state prisons.
But city officials said the new method caused a serious budget crisis for Marion, one that jeopardized their ability to provide basic services. City Manager Bob Boyette said in November the ad valorum method would deprive the city of about $500,000 in fiscal year 2008-09. The closing of the Swift Galey and Spectrum plants caused more financial troubles for the city.
Council members proposed the county adopt a quarterly calculation by both methods and split the difference with the city. The county would be "almost certain" to gain an increase of $250,000 annually and the city would lose at least that amount.
But at Monday's meeting, Abernathy suggested that they start at $250,000 and increase the amount to the city by $25,000 a year for five years. "We would receive the amount lost due to the annexations in the third year," he said in a memo. "This seems to me to measured and not excessive."
Some commissioners thought a different approach should be taken. "I feel like a three-year agreement is more appropriate," said Commissioner Michael Lavender.
Both county and city officials plan to meet again and discuss the sales tax issue and others. City officials are also asking for the Marion Area fire tax to be raised from 4 cents per $100 valuation to 6 cents per $100 valuation. The additional two cents would be used toward the purchase of an aerial truck and a brush truck as well as pay for a sixth man the fire department added last year.