CEDAR POINT — Cedar Point Mayor Scott Hatsell and town commissioners agreed Thursday night to ask Carteret County officials to change the way state-shared sales tax revenue is distributed among county municipalities.
During its monthly work session, conducted on Zoom, the board agreed by a 4-0 vote to ask the county to distribute the revenue on a per capita basis, or based on population, instead of based on ad valorem property tax levies, which favor towns with higher property values.
The county receives sales tax revenue from the state, which distributes its revenues among the 100 counties by the ad valorem method. The county keeps by far the largest chunk, then distributes the rest to the towns.
Cedar Point commissioners and the mayor will sign a letter, penned by Town Manager David Rief, asking for the change.
Newport officials have already made the request and Town Manager Bryan Chadwick was at the meeting, as was Cape Carteret Mayor Will Baker, who said he believes his town will support the change, too.
If the county agrees to the change, it will increase sales tax revenue for some of the mainland towns, although it would decrease accordingly for the tourist-driven Bogue Banks towns, Mr. Rief said.
For example, in 2020 Cedar Point received $112,285 in sales tax revenue, but under a per capita system, it could have gotten $440,000 out of the county’s approximately $30 million.
A switch, Mr. Rief said, “would reduce the disparity in distribution amounts among the towns” and “help offset the burden imposed upon local residents and mainland towns that provide critical infrastructure and otherwise support the seasonal influx of tourists.”
He said Cedar Point and Cape Carteret have become “economic hubs” that support full-time residents of western Carteret County and the tourists who flock to Emerald Isle and the other island towns. But as the resort towns add to their tax rates, he said they gain an outsized proportion of the “sales tax pie.”
When the current system went into effect years ago, he said Carteret County was much different, more rural, so there was less disparity in the sales tax distribution. With Interstate 42 soon to be built to connect the county more directly to inland cities, the manager said in the letter he wrote, it will be increasingly important for mainland towns to add infrastructure to handle growth. But, he said it will become increasingly difficult to do that unless the towns on the mainland get more revenue.
Finally, Mr. Rief said the island towns couldn’t exist as they are without the mainland municipalities. The tourists shop in the mainland towns, and housing has gotten so expensive on Bogue Banks that many staffers in the island towns live on the mainland, he noted.
In short, island towns are “subsidized at the expense of full-time residents,” he concluded.
Mayor Hatsell said he supported asking the county to make the change, but noted it had been tried before, unsuccessfully.
Mayor Pro Tem Pam Castellano agreed, but said “it will be a fight.”
Cape Carteret Mayor Baker said he appreciated Mr. Rief’s time, research and effort to write the letter, and Mr. Chadwick, the Newport town manager, said he appreciated the support from Cedar Point.
Contact Brad Rich at 252-864-1532; email Brad@thenewstimes.com; or follow on Twitter @brichccnt.