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Thank you for visiting the Legislative Advocacy home page of the North Carolina League of Municipalities. Here you will find all the latest updates on pending legislation, issues of importance to municipalities, regulatory affairs, League events and more.
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Below is all of the League's analysis regarding HB 998 Tax Simplification and Reduction Act. Included are estimated city-by-city impacts of the version of HB 998 passed by the Senate, a breakdown of the impact of specific provisions of the Senate's version of HB 998, and a comparison of the House & Senate's versions of HB 998. If you have any questions regarding any of the documents below please contact League Director of Governmental Affairs Paul Meyer. More Information Posted on June 18, 2013 by Paul Meyer
The June 14 LeagueLINC Bulletin is now available. Senators released their tax reform plan this week, and the League's analysis shows that the Senate plan would cost local governments in excess of $160 million annually. We are asking League members to come to Raleigh either Tuesday or Wednesday of next week to meet with legislators and discuss the negative impact this plan will have. Full details are available in the Bulletin. Contact Jennifer Webb to let her know that you'll be with us in Raleigh next week. More Information Posted on June 14, 2013 by Paul Meyer
This afternoon the Senate Finance Committee voted to advance a tax reform proposal that would eventually cost cities and towns nearly $150 million annually. That version of HB 998 Tax Simplification and Reduction Act now moves to the Senate floor for consideration by the full Senate.
Earlier this morning the League released an analysis showing that the bill’s new provisions – including elimination of the local food tax and local privilege license tax, and a requirement for local governments to pay sales taxes – would cost cities and towns nearly $150 million annually at full implementation. Many municipalities would need to enact significant property tax increases in order to make up for the lost revenue. More Information Posted on June 13, 2013 by Paul Meyer League Estimates Indicate Cities Would Lose Nearly $150 Million Through Loss of Food Tax, Local Privilege License Tax, and Sales Tax Refunds
In a surprising turnaround after months of discussions between legislators, city elected officials, and League staff which resulted in the development of three tax reform proposals that protect municipal revenues, a revised tax reform plan was released Tuesday that would require municipalities to pay sales taxes and eliminate other key municipal revenue sources. Whereas all previous tax reform bills attempted a comprehensive reform of the state tax code, the newest proposal focuses almost solely on tax cuts with no wide expansion of sales taxes to services. Contact your Senator now to let them know that you oppose this bill and that this plan would have a negative impact on your municipality. This bill could pass out of the Senate by Thursday of this week.
Based on preliminary League estimates, the version of HB 998 Tax Simplification and Reduction Act released in a Senate committee Tuesday would ultimately result in a net loss to municipalities of nearly $150 million annually, assuming counties opt not to levy a local food tax. The bill discussed in the Senate Finance Committee eliminates the local sales tax on food by 2016, and eliminates all municipal privilege licenses taxes in 2018. These two changes alone are estimated to cost municipalities statewide at least $156 million annually. This bill also eliminates sales tax refunds for local governments, which could eventually cost municipalities in excess of an additional $80 million annually. The bill does include some sales tax changes that will offset part of these losses, resulting in the net loss of nearly $150 million. However, there is no hold harmless provision and no expansion of sales taxes to services in the bill, meaning municipalities would have little choice but to raise property taxes or continue to cut services in order to provide their citizens with the basic services they require.
The League has put together this chart showing preliminary city-by-city estimates of the effect that this plan would have at full implementation. The League has also compiled this chart comparing the version of HB 998 passed by the House Monday with the version presented in the Senate Tuesday. The fiscal note attached to the bill can be found here. More Information Posted on June 12, 2013 by Paul Meyer
SB 305 DMV Commission Contract Changes has been scheduled for a hearing in the Senate Transportation Committee tomorrow (Wednesday) at 11 a.m. This bill will increase the costs to local governments of the new vehicle property tax collection program (Tax & Tag Together) by increasing the fees paid to the DMV contract license plate agents for collection of the tax. An analysis done by the N.C. Association of County Commissioners estimates that the current version of the bill will cost local governments statewide an additional $5.5 million annually. The current number of registered motor vehicles in cities is not available, but municipal governments would be required to pay additional money to collect property taxes on each vehicle sited within its jurisdiction. That additional revenue is not being required to be used for additional positions to assist with the implementation of the new Tax & Tag Together program – it is simply additional revenue from local governments to contract license plate agents, and it would increase governments' cost of doing business.
Please contact your Senator and members of the Senate Transportation Committee to let them know of your concerns regarding the bill. If the bill is approved by the Senate Transportation Committee tomorrow, it will move on to the Senate Finance Committee. More Information Posted on June 11, 2013 by Paul Meyer
The House Appropriations Committee released its proposed version of the State budget (SB 402) on Sunday, June 9. The committee proposal contains a one-year extension of the Transitional Hold Harmless dollars for cities and counties. A preliminary comparison of the House and Senate versions of the budget by the League's Governmental Affairs team can be found here. The budget is scheduled for consideration by the House Appropriations Committee on Tuesday morning at 8:30 a.m. and it is expected that the full House will approve the budget later this week. You can find a list of the House Appropriations Committee members here. More Information Posted on June 10, 2013 by Karl Knapp The June 7 LeagueLINC Bulletin is now available. Legislators were busy on Friday as House members began rolling out portions of the budget and considered issues such as tax reform and hydraulic fracturing on the House floor. For all of the most up-to-date information on all of those issues, plus many more, make sure to check out this week's Bulletin. More Information Posted on June 07, 2013 by Jennifer Webb
The House Transportation Committee today voted in favor of a revised version of SB 81 Charlotte Regional Airport Authority that would still transfer control of Charlotte Douglas International Airport from the City of Charlotte to a newly-created regional authority.
Representatives from the City of Charlotte have been negotiating with House bill sponsors, but sponsor Rep. Bill Brawley said those negotiations were at an “impasse.” Rep. Brawley said that legislators had offered to convene a study committee with some representatives appointed by the City of Charlotte leading up to a transition of airport control next year. Charlotte city manager Ron Carlee said he would not say that negotiations were at an impasse, but that the City wanted more time to study the issue with representatives from the Mecklenburg County business community.
Said Rep. Rodney Moore, “This is no more than a takeover or a grab from the City of Charlotte.”
More Information Posted on June 04, 2013 by Chris Nida
The House Finance Committee today adopted a committee substitute for the House tax reform package, HB 998 Tax Simplification and Reduction Act. The League’s chart comparing the three major tax reform bills has been updated to reflect the changes to HB 998.
The new version of HB 998 includes different provisions for how cities and towns would be reimbursed for the loss of revenue due to the elimination of the electricity and natural gas franchise taxes. The previous version of HB 998 provided that each city and town would receive distributions each year in the future equal to the amount it received in electricity and natural gas franchise tax distributions for FY 13-14. The new version of the bill will continue to keep city electricity and natural gas revenue at the FY 13-14 level or higher, but only if sales of gas and electricity do not decline below the FY 13-14 level. While such a decline in electricity sales is unlikely, the sensitivity of natural gas sales to winter temperatures makes a decline in these sales more possible. More Information Posted on June 04, 2013 by Karl Knapp
The May 31 LeagueLINC Bulletin is now available. The General Assembly released details on three separate tax reform plans yesterday, and the Bulletin is the only place to find a detailed analysis of what those plans would mean to North Carolina's cities and towns. Updates on the budget, cell towers, and several local bills are also included this week. Check out the Bulletin for all the legislative news of importance to North Carolina's cities and towns. More Information Posted on May 31, 2013 by Paul Meyer 1
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