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ACTION ALERT: Cap on City Property Tax Revenues Proposed

May 08, 2014

Please contact your legislators and let them know that you oppose the cap on city property tax revenues that was advanced by a legislative committee today. The proposal was part of legislation entitled the Energy Modernization Act, which deals largely with regulations related to drilling and hydraulic fracturing. However, a section on Page 25 limits the increase in property tax revenues for a city to “no more than eight percent (8%) from the city property tax revenues for the prior fiscal year.” This broadly written section would apply to every city in the state, regardless of whether any drilling activities are taking place, and would be North Carolina’s first-ever statutory restriction on the amount of property tax revenues a municipality could collect.

The League opposes any legislative cap on the amount of property tax revenues a municipality can take in. Cities use property taxes to fund the services required by the businesses and taxpayers located in their borders. Restricting their ability to collect these revenues could hamper their ability to provide these services and harm economic development efforts. This proposal, which the League did not see prior to Thursday’s committee meeting, was contained in drilling legislation and came out of the Joint Legislative Commission on Energy Policy, but its potential effects are much more far-reaching.

Please talk with your legislators this weekend about the impact a cap on property tax revenues could have on your city or town. Following today’s committee vote, the legislation is eligible for introduction in the General Assembly session that begins next Wednesday. It would still need to be considered by both the House and Senate and go through the Governor before becoming law. If you have any questions on this proposal, please contact League Director of Research & Policy Analysis Chris Nida.

Posted on May 08, 2014 by Paul Meyer