On Monday, the commissioners of Cumberland County resolved a multi-million dollar disagreement concerning the allocation of sales tax revenue. This issue involved Cumberland County, the City of Fayetteville, and several smaller municipalities within the region. The new one-year agreement was reached after concerns were raised by governing bodies in Fayetteville, Hope Mills, and Spring Lake regarding the distribution formula established in 2023. As a result of these disputes, Fayetteville withheld $1.6 million from the county during the previous fiscal year. Under the revised plan, this amount has been repaid, and an additional $5.6 million will be distributed among the municipalities.

The dispute dates back to the early 2000s when Fayetteville expanded its borders through annexations, significantly increasing its population and consequently its share of sales tax revenue. Traditionally, the funds were allocated based on population figures. However, Cumberland County proposed shifting to property value-based allocations, which would reduce municipal revenues while boosting the county's income. To ease the transition, a temporary revenue-sharing arrangement was approved last year, amended this week to provide municipalities with extra financial support for one year.

Despite reaching consensus, Commissioner Glenn Adams dissented, arguing that past agreements should remain unaltered as they were equitable. In contrast, Chairman Kirk deViere emphasized that the compromise aimed to ensure smaller towns retained necessary resources derived from sales taxes.

For context, the current sales tax rate in Cumberland County stands at 7%, with the state retaining 4.75% and the remaining 2.25% split between the county and municipalities. During the 2023-24 fiscal year, the total shared sales tax amounted to over $156.3 million. While Cumberland County’s portion would have been approximately $96.8 million, it voluntarily transferred $15.5 million to assist the city and towns financially.

Ultimately, the newly agreed-upon plan not only settles immediate financial disagreements but also fosters collaboration between local governments. By addressing both short-term needs and long-standing issues related to revenue sharing, Cumberland County sets a precedent for constructive negotiation and mutual benefit across all levels of governance.