State Sen. Chad Barefoot is championing a bill that would reinstate funds that towns like Zebulon were in jeopardy of losing come July.
The so-called “hold-harmless funds” were intended to make towns financially whole in the wake of other taxes the General Assembly eliminated.
But those funds were never intended to last forever. Based in part on a community’s industrial tax base, the money meant more to some towns than others. Zebulon is one of those towns that would lose a significant amount of revenue if those funds stop flowing.
Barefoot’s bill would extend the payments for four years. After that the money goes away.
For towns like Zebulon, it would mean they could breathe a sigh of relief.
What they can’t do is consider the battle won. That four-year payment window (another bill proposes a two-year continuation) gives towns an opportunity to plan for the loss of revenue by phasing out other expenses or establishing other revenue streams, so that, when the money from the state spigot dries up, the towns won’t be caught having to make drastic choices and impacting services and employees in a major way.
But Zebulon would be failing in its duty to residents if it does not start planning now.
The end of the hold-harmless payments didn’t catch towns by surprise. Those funds were never intended to be paid out in perpituity. That town officials hadn’t already been preparing for this day is a mistake. But what’s done is done.
If the legislation passes town leaders should start looking right away at how to deal with the loss of that money in the next few years.
It serves no one in Zebulon well to just assume they can fight this year’s battle again a few years from now and have it come out to their advantage. There’s not a taxpayer in Zebulon who wants to see their taxes raised. And, they particularly don’t want to see them raised a lot all at once. If the General Assembly sees fit to give towns like Zebulon a little more time, they’d be well advised to start making those changes in smaller, more manageable increments now to avoid sticker shock later.