Exclusive interview with State Sen. Bill Cook explores host of issues
Editor’s note: Sen. Cook was elected in 2012 and reelected in 2014, while on a national level Republicans became a majority in the U.S. Senate. In his 2014 campaign for the Senate 1 District, Cook faced a Democratic candidate and withstood withering criticism from environmentalists and a barrage of money spent by the left to defeat him. With these things in mind, we interviewed the Senator at the recent NC East Alliance meeting in Plymouth, discussing a range of topics important to his constituents.
Sales Tax Distributions:
Cook has dealt with competing proposals regarding how sales taxes are distributed between the state and local jurisdictions. Proposals from Sen. Harry Brown, R-Jones, who is in charge of the budget process and Sen. Bob Rucho, R Mecklenberg, have been submitted — each with different consequents, should the new legislation pass the General Assembly.
Cook believes that counties have been under-compensated in this regard because the sales taxes have been distributed disproportionately to the higher population counties at the expense of the smaller counties with lesser populations. He realizes that these smaller counties do not have big box stores and that many times they lack the money to build a school unless they receive a larger share of the sales tax pie. But the process has to be fair to small and large counties alike.
Currently, sales taxes collected go to Raleigh with 2 percent being returned to the counties and 5 percent being retained by the state. Of the monies returned to the counties, 75 percent is typically returned to the county where the purchase was made, with the remaining 25 percent going to a county’s municipalities, according to population.
As Cook sees it, with the current situation, the rich counties get richer and the poor counties get poorer. More sales tax in collected in larger counties keeps the small counties from growing in a number of ways. Therefore, the reforms being sought can only be fair if every county can grow. The new bill distributes all taxes based upon population, which negates the influence of the large counties with the big-box stores. Smaller, poorer counties would receive more money.
The negative side of these proposals is that working strictly on population, more money is taken from the large counties, which can harmfjul. While reforms are needed, the changes should not hurt the ability of any county to maintain economic balance at the expense of another.
In the Sen. Brown bill, $9 million would be taken away from Dare County, which is patently unfair, and similarly, Currituck County would also be negatively affected in a major way. According to Cook, he favors the Rucho plan because each county will maintain its baseline of tax revenue but then the excess, through growth, will be distributed among the various counties by population. Therefore, if a county had $1 million in sales tax revenues one year and $1.5 million was generated in the next year, only the $500,000 excess would be distributed.
This plan will become more beneficial to the smaller counties as it is the goal of the State Senate to move away from Income Tax and toward Sales Taxes.
School Boards and their County Commissioners:
Cook agrees that there has always been concern that the County Commissioners have been required to provide the funding for school needs, including capital improvements, without having the ability to provide any input into the bid process, and awarding of contracts.
Many Commissioners have advocated for a committee process to review how the money is being spent in order to make certain that the local school boards get the most “bang for the buck.” At a recent meeting in Edenton, Sen. Harry Brown was asked about this matter. He stated that there was some interest in addressing this matter in the Legislature, but stated that this was not a new issue and that this was brought up in the General Assembly last year, but did not pass. He agrees that commissioners and experts among the public could provide beneficial input into the capital improvement bid process and believes that there is a bill going through the General Assembly, but he knows nothing of the specifics at this time.
Electric Rates and Alternative Energy Sources:
Cook said wind and solar, as currently implemented, now increase electric rates and increase property tax rates. These projects exist based solely on Federal and State money and tax credits. The state has mandated that energy companies are required to purchase wind power up to 12-13 percent of generation. Renewables receive substantial subsidies, providing a built in market. Not only do taxpayers help pay for development of alternative energies, but then we turn around and tell the big utility companies that they have to purchase the generated power. Cook believes that most people just want cheap power and a healthy economy so he favors the elimination of energy subsidies.
Rose Acres Egg Farm and state regulators:
This business has been fighting the Department of Energy and Natural Resources for years, but they are now in Federal Court. Cook has met with the business leaders about the challenges they face in dealing with overzealous environmentalists. Rose Acres has some precedents on their side that can help in their litigation.. But the financial consequences have made it harder for the business to expand and employ larger numbers of people in an economically needy county. The state agency is requiring a company that does not discharge water, to have a water discharge plan. The litigation makes it difficult for Rose Acres to run its business, but they are optimistic about the results they will receive in court and their future prospects.
Proposed Auto Manufacturer Locating in the Northeast:
Cook has a different point of view about the value of big business and its effects on the economy in general. He believes 70 percent of all job creation comes from small business, not big business. Of course, it would be great to get an auto manufacturer in this region; however, the pain of incentives meant to lure those businesses is not good for North Carolina. He asks, rhetorically, what do you would say to small employers? Why is it that only big employers can receive incentives? Cook said there is a liberal mindset that states need to bribe business, as the companies just play one state against another. As an example, he cites the $79 million per year in incentives paid to movie producers – with an economic benefit to the state falling far short of its cost.
“We don’t want to encourage that behavior,” said Cook. “Business is looking for a long term benefit. If you can show them that your state is doing all the sound things that you should be doing, they will come here.”
He offers Texas and Florida as examples — where neither state has a personal income tax – and companies come there without being bribed.
Reporter’s note: Cook is not in sync with Gov. McCrory and House Rep. Bog Steinburg on the question of tax incentives. His reasoning does jibe with the John Locke Foundation and other conservative think tanks. Nor’eastern News will continue to follow these matters and provide our readers with the various points of view.