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League Bulletin

February 14, 2020

WHAT HAPPENED: The Revenue Laws Study Committee heard presentations on various aspects of the state’s sales tax, NCDIT released new broadband accessibility data, and WRAL continues its series on North Carolina’s most pressing issues.

WHAT IT MEANS: Read below for analysis of that Wednesday committee discussion, which shows once again how difficult it is to gain consensus for change when it comes to the state’s system of taxation. The League is watching developments closely, and any future updates will be included in this bulletin.

ON TAP: On internet access, NCDIT’s North Carolina Broadband Indices hope to shore up a long-standing problem: unreliable data regarding broadband access. The Indices take eight factors into account to generate a “Broadband Availability Score” for each county.

THE SKINNY: Broadband also remains the topic of conversation on WRAL. Last week, the Raleigh-based news outlet looked at the economic impact of rural broadband (specifically, that N.C. has failed to realize more than $3 billion in business revenue over the last three years due to unreliable internet.) This week, the attention shifts to healthcare and schools.

Members of the legislature’s interim tax and finance committee received staff presentations on local sales taxes Wednesday.

The presentations focused on potential ways to update the formula the state currently uses to determine how sales taxes are distributed to each county. Staff said they were asked to develop these options as a means of modernizing the distribution formulas to match the state’s current economy. The system now used has been in place for several decades, and any changes to it would inevitably cause some counties to gain revenue while other counties would lose revenue. To minimize any negative effects if changes to the formula were made, staff suggested injecting more funding into the equation, such as an appropriation to local governments like a hold harmless payment.

The changes discussed would not affect the methods counties can choose to distribute sales tax revenues to municipalities within their borders.

In response to the staff presentation, some legislators on the committee questioned the need for making the policy change at all, noting the intense opposition previous proposals on the subject had generated. Those proposals, filed in recent legislative sessions, failed to gain consensus among legislators of both parties, particularly in the House. Committee co-chair Sen. Paul Newton stressed that the staff presentation given Wednesday was simply a starting point for future discussions. The committee will likely continue exploring the topic at its March meeting.

If the committee should recommend legislation for Short Session consideration, the League would continue its long-standing, steadfast position that any changes must include ways for all local governments to grow their revenues. 

Among the other topics of discussion at Wednesday’s meeting was options for providing counties with flexibility in levying local option sales taxes under Articles 43 and 46. These are sales tax revenue options that are available to counties in N.C., but none of the proceeds from these sales taxes are shared with municipalities.​

The N.C. Department of Information Technology this week released new data that will provide a more accurate look at the current state of broadband access and the digital divide in North Carolina.

Announced by Sec. Eric Boyette at the N.C. State Institute for Emerging Issues' ReCONNECT to Technological Opportunity Forum, the North Carolina Broadband Indices include mapsrankings and a variety of other data relating to both broadband access and broadband availability by county.

"Data on where broadband is and isn’t available is notoriously under-reported and thus does not fully depict the reality on the ground for many North Carolinians," read NCDIT's press release. "The North Carolina Broadband Indices are two unique measures designed to create a more accurate picture of the state’s broadband access, adoption, and the resulting digital divide."

The indices can be viewed here.​

In their ongoing series covering some of our state's most vital issues, WRAL, in partnership with the League, explores this week how broadband access affects rural education and health care. 

The most eye-catching number: 1-in-10 North Carolina students do not have access to home internet. That's according to the N.C. Broadband Infrastructure Office.

The article can be read here, and we will continue to share WRAL's series as articles are published.

Through the presence of Facebook, Rutherford County and Forest City are now enjoying the introduction of much-needed technologies. That progress can be traced directly back to local investments.

In 2010, Facebook was looking for a home for one of its four data centers. The facility would be an immense, 350,000-square-foot building housing tens of thousands of servers. A campus of that size requires a great deal of infrastructural support – roads, water, electric – and Facebook needed a host city that would be able to provide these services in large capacity.

Enter Rutherford County and Forest City, who had been making those necessary investments for years.

Now, at home in Forest City, Facebook is partnering with MCNC, a technology non-profit that owns and operates the state-wide fiber-based North Carolina Research and Education Network, to build approximately 100 miles of fiber to make high-speed internet available to key community institutions: schools, medical facilities, and government offices.

Read more about Forest City and the work of local governments in western North Carolina on Here We Grow.