Urgent Alert -- Bad news and good news

You need to contact your legislators ASAP

The House and Senate leadership have agreed on a budget conference report containing the biennial state budget, county Medicaid relief, and additional local county revenue sources.

The good news for municipalities is that we have been assured that the county Medicaid relief swap plan will not affect future municipal revenue growth. A previous version would have reduced future municipal sales tax revenue growth. We appreciate the leadership protecting this growth.

The bad news: We were flabbergasted to discover the newly authorized revenue sources include no municipal share to help address the great and growing municipal public facility needs. The deal agreed to by House and Senate leadership would authorize county boards of commissioners to levy either an additional one-quarter sales tax or a .4 percent local land transfer tax, both subject to a referendum. All of the revenue would go to county governments. That would give municipal officials little incentive to work for approval of the new tax in a referendum.

This can be corrected. The League staff has been working hard with the legislative leadership to get this corrected before the House and Senate vote on the conference report on Saturday and early next week.

Action needed immediately: All municipal officials need to contact all of your legislators ASAP with one clear message. We understand county school needs, but we have our own great and growing municipal needs, and we need help. Any newly authorized revenue sources need to include a significant municipal share for transportation, water and sewer, and other needs. This was to agreed months ago by the League and the N.C. Association of County Commissioners. Please fix this problem.

No competition bill turned into study
The House Finance Committee Wednesday voted to approve a substitute version of HB 1587 – Local Government Fair Competition Act that turns the bill into a study. This revised proposal for a study now goes to the full House. As introduced, HB 1587 placed new and unreasonable regulatory and political hurdles on local governments that were considering provision of telecommunications services for a fee.

The League opposed HB 1587 as introduced because it was a “no competition” bill, designed to keep local governments out of the telecommunications market. Our thanks to the many municipal officials and groups who worked to oppose this legislation.

The substitute bill approved by the Finance Committee authorizes the Joint Legislative Utility Review Committee to study and report on four areas: adequacy of coverage of communications services offered by current providers, including rural and other high cost areas; adequacy of communications services currently offered by local governments; private and public costs and benefits of providing communications services through private providers compared to a local government owned service producer (effect on existing and future jobs, actual economic development prospects, tax-base growth, education and public health); and effect of local government owned and operated communications services on competition with privately owned services.

The study committee is to submit its final report to the 2009 session, but may make an interim report next year.

Act fast if you have a position on interbasin transfers
A bill to tighten rules on interbasin transfers is on the fast track for passage. The Senate Agriculture and Environment Committee approved a committee substitute for SB 1421 – Amend Interbasin Transfer Laws on Tuesday and the Senate Finance Committee Thursday took the provisions of that bill and placed them into HB 820. HB 820 was a bill on an unrelated subject that had already passed the House. Today, the Senate passed the bill with the added interbasin transfer provisions, and it will return to the House floor for concurrence. This means the bill would not go through any House committees.

If your city has a position on the bill, you should contact your House members immediately to discuss your position. You should reference HB 820, because this is now the bill under consideration.

The changes will require applicants seeking permits for interbasin transfers to provide more information, including a description of every available or planned source of water in the receiving basin and existing, planned or foreseeable transfers and withdrawals from the source basin. Also required is more public notification and informational meetings, a comprehensive environmental impact statement and participation in mediation. The Environmental Management Commission would make a draft determination on the request and then hold public hearings. Additional criteria would have to be met before the EMC could approve the permit, including that there is no reasonable alternative and that the applicant will not resell any of the transferred water. According to the bill, the projected future water needs in a receiving river basin are subordinate to projected future water needs in the source basin. The bill would be effective Dec. 1, 2007 and would apply to interbasin transfer applications made on or after that date.

Tip fee moving quickly
Today the Senate passed SB 1492 – Solid Waste Management Act of 2007. The bill sets new siting rules, permit fees and technical standards for landfills and includes a $1.50 per ton state tip tax.

Our overriding concern has been the potential cost to municipalities and, in particular, the proposed statewide tipping tax on solid waste disposal. Proceeds from the tax are to be used for assessment and remediation of pre-1983 unlined landfills and grants to local governments for recycling programs. A very limited liability protection would be afforded to local governments that might otherwise be responsible parties for those old landfills.

The League has long-standing policy to oppose the imposition of state taxes on local enterprise services such as solid waste collection and disposal. Our membership did not ask for and does not want a state tip tax. The partial liability protection proposed in the bill is simply not sufficient to convince us otherwise.

Meanwhile the House Environment Committee has placed solid waste provisions into a substitute for SB 716, a bill originally dealing with poultry that had already passed the Senate. The new version of SB 716 removes the landfill technical standards and siting rules, but retains the tip tax at a rate of $2.00 per ton. An amendment to the liability language was made in committee that may improve it from the municipal standpoint. The meeting adjourned before a vote could be taken on the amended bill but we expect the committee to meet later today or tomorrow.

It is not clear which bill—SB 1492 or SB 716—will be ultimately be the vehicle for the solid waste provisions. House members need to hear from you.

Cell tower bill headed to floor
The substitute version of SB 831 – Wireless Telecommunications Facilities that passed the Senate was voted out of House Finance today. The League has been in ongoing negotiations with the cell tower industry, and this version of the bill reflects progress on some of our concerns. We still have a few issues in contention and are continuing to work on them on the House side.

Session in its last days
The conference report for the budget is expected to voted upon sometime tomorrow (Saturday), with third reading on Monday. Action is virtually nonstop now, as legislators race toward a projected adjournment next Thursday.