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County, towns win in Senate's sales tax proposal

Henderson County would come out a big winner and the county's five towns would gain at least 10 percent more in sales tax revenue in a new distribution formula contained in a budget the Senate unveiled this week.

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The Senate budget overhauls the formula used to divvy up sales tax to cities and counties. It shifts the formula its current basis of 25 percent per capita and 75 percent point of collection — where the purchase was made — to 80 percent per capita and 20 percent point of collection. The new way of slicing the pie tends to help smaller rural counties to the detriment of large urban counties that draw shoppers from smaller counties in their region.

By the time the new formula is fully implemented, in 2020, Henderson County would see a gain of $2.7 million, up 12 percent from the allocation under current law. If the county voters approved a half-cent local option sales tax, as the law permits, it would see an increase of $8.98 million, a 40 percent gain over the current formula.

Flat Rock would gain $33,336, up 11 percent. Other towns' gains and percentage by the fourth year are Fletcher, $138,999, 10 percent; Hendersonville, $324,001, 11 percent; Laurel Park, $64,294, 11 percent; and Mills River, $36,733, 12 percent.

Buncombe would be one of the big losers in the state. It would lose $9.1 million by the fourth year unless it approves a local option sales tax. With that it would come out ahead of the current formula's distribution by 1 percent. Unlike in Henderson County, all of Buncombe's towns would lose money.