Towns across the state had 10 years to prepared for the eventual loss of revenue from the state inventory tax after legislators did away with it and replaced the money with what they called “hold harmless” funds. They idea was to avoid punishing towns who relied on the money from that tax to run their own governments. But when legislators approved that plan, they put a 10-year limit on that funding.
In theory, that should have given the towns plenty of time to replace the money with funds from somewhere else.
But most towns, including Zebulon, made the assumption that the replacement money would continue to funnel down to the town on a permanent basis.
And, so, they were caught with their pants down this year when they realized there was no desire on Jones Street to keep that gravy train going.
In Zebulon, the loss of revenue was on the order of $400,000. That’s not chump change.
The town, and in particular Mayor Bob Matheny, scrambled and legislators approved a plan for a one-year restoration of the money – at a reduced rate.
This year, the town will get about half the money it has normally received. Next year, there will be none.
Town leaders must start looking now at what can be done to either replace the funding through a local tax, or what services can be eliminated to save on expenses.
That may seem like obvious advice, but it wasn’t the path towns like Zebulon chose 10 years ago, so the advice bears repeating today.
Hopefully, wiser heads will prevail and plans can be made early.