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Council Approves Intergovernmental Agreement Tied to County Sales-tax Referendum; Implementation Timeline Explained
Summary
Statesville approved an intergovernmental agreement that would govern distribution of revenue if county voters approve a sales-tax referendum on Nov. 4. City staff told council collections would begin Jan. 1, 2026, with distributions to municipalities on July 1, 2027, and any millage-rate adjustments occurring afterward.
Statesville — The City Council approved an intergovernmental agreement Aug. 19 that sets the local framework for distributing revenue if a proposed county sales-tax referendum passes on Nov. 4.
Finance staff explained the agreement and the timetable: if county voters approve the referendum, collections would begin Jan. 1, 2026; the county would distribute revenue to itself and to participating municipalities on July 1, 2027; any ordinance to reduce the city’s millage rate would be considered later in 2027.
Why it matters: the referendum would impose an additional sales tax intended to provide revenue replacement and enable a reduction in the property tax (millage) rate, but the timeline means residents would not see a lower millage rate until the council votes on that change in mid-2027.
Key details - Referendum date: Nov. 4, 2025 (as stated by staff). (Finance staff) - Collection start: Jan. 1, 2026 (if referendum passes). (Finance staff) - Distribution to municipalities: July 1, 2027. (Finance staff) - Purpose: The additional sales tax is intended as revenue replacement to reduce property tax millage; staff emphasized it is not intended to increase the city’s millage rate.
Outcome Council approved the intergovernmental agreement as recommended and directed staff to proceed with the administrative steps associated with potential participation if the referendum passes.
