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Sen. Rucho Says Sales Tax Distribution Changes Could Be Coming

Sen. Bob Rucho and Rep. Bill Brawley appeared at the N.C. Chamber's 2014 Tax Conference yesterday to preview additional tax reform efforts that the General Assembly will consider next year. Most significantly for North Carolina's cities and towns, Sen. Rucho said the reform would include changes to the ways that sales tax revenues are distributed among the state's counties. "When you have a state that's interested in economic growth, you can't just have six urban centers being the only area of prosperity," Sen. Rucho said. "It requires to have all 100 counties with the opportunity for prosperity. We'll look at some kind of changes in the way that sales tax is distributed so that the low and the poor counties will have an opportunity to grow and prosper." These changes would be intended to be made along with an expansion of the sales tax to more services, as Sen. Rucho said his goal is to move the state to a consumption-based economy while lowering and possibly eventually eliminating the state income tax.

In light of Sen. Rucho's comments, municipal officials may be interested in this recent blog post from Canaan Huie of Moore & Van Allen. Huie, a former attorney at the General Assembly and General Counsel for the N.C. Department of Revenue, discusses the current distribution of local sales taxes and which counties could be affected by any changes in that distribution. These issues and more will be up for discussion at the League's upcoming regional meeting on municipal finance, scheduled for 3-5 p.m.  on Dec. 3 in Southport.

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Oil & Gas Efforts Near End as Coal Ash Activities Rev Up

North Carolina's two most high-profile environmental regulation initiatives of the past few years stood poised to hit milestones today. The N.C. Mining & Energy Commission (MEC) was slated to approve the rules applying to onshore oil and gas extraction activities, while the Coal Ash Management Commission (CAMC) held its initial organizational meeting. The League participated extensively in the MEC's oil and gas rulemaking process over the past two years, serving on numerous workgroups and submitting comments on the proposed rules. If approved by the MEC today, those rules would then proceed to the N.C. General Assembly for consideration early next year, ultimately opening the door to these activities. Meanwhile, as the CAMC swore in commission members and received an overview of existing regulations applying to management of this hazardous material, the N.C. Environmental Management Commission (EMC) began its legislatively-mandated study of the beneficial uses of coal ash earlier this week. EMC commissioners also voted yesterday to approve a report requested by the legislature regarding clarification of the state's groundwater compliance boundary rules, an issue brought to the forefront due to the coal ash disposal debate. The League remained active on the groundwater compliance boundary issue because those rules apply to many municipal activities, such as land application of biosolids and redevelopment of contaminated sites in urban areas. Read more about this debate in "Judge's Decision Upends Law for Land Application Sites' Groundwater Contamination," March 2014 EcoLINC. Contact: Sarah Collins
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Maneuvering Continues for House Speaker

The jockeying to become the next Speaker of the North Carolina House continues, and House Republicans now say that they will meet Nov. 22 to select their nominee. A meeting scheduled for Saturday will involve some organizational activities leading up to the selection and some politicking for the post. Reps. Tim Moore of Kings Mountain and Leo Daughtry of Smithfield continue to be viewed as the favorites to succeed House Speaker Thom Tillis, who was recently elected to the U.S. Senate.

At least four others are expressing interest. They are Reps. Justin Burr of Albemarle, Bryan Holloway of King, John Blust of Greensboro, and Mitchell Setzer of Catawba. Meanwhile, news reports indicate that Rep. Mike Hager of Rutherfordton may have shifted his sights to the House Majority Leader post, which is currently held by Rep. Edgar Starnes of Hickory. You can read a previous piece from from LINC'ed IN about the House Speaker's race hereThis article from the Winston-Salem Journal also takes a look at the talk around who will be the next House Speaker.

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League to Host Regional Meetings on Future of Municipal Finance

The League will host the first in a series of regional meetings examining the future of municipal finance on December 3 in Southport. The series of meetings, A Path Forward: Vibrant Cities Today and Tomorrow, will examine the financial challenges facing municipalities big and small, including the $62 million fiscal cliff created by the pending loss of privilege license tax revenue. Future meetings to be held in other areas of the state are being planned. 

The Southport meeting will include a presentation by League staff looking at the history of municipal finance, comparative data with other states, and where cities and towns stand today. A panel discussion will focus on the economic pressures faced by communities around the state and how a tax structure that promotes low property taxes has played a critical role in economic development. Panelists will include elected and appointed municipal officials from across the region, and those playing key roles in economic recruitment and business development.

In announcing the meetings, League President Ronnie Wall said, "Fundamental changes that are affecting how and where people live, combined with state policies that place new limits on how cities can raise revenue and pay for the services that residents desire, demand a public conversation about how North Carolina municipalities move forward in the future. Healthy cities and towns are critical to a healthy state economy."

See more about the Southport meeting, including registration information, here.

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Governor McCrory Talks Possibility of Special Session

Governor Pat McCrory, in interviews with reporters this week, raised the issue of calling a special legislative session to address incentives designed to bring jobs to the state. Governor McCrory told reporters that he would call a special session if a quick decision is needed in order to land a business considering locating in the state. The governor and Commerce Secretary Sharon Decker are concerned that the state is close to reaching a monetary cap for one of the state's key incentives programs -- the Jobs Development Investment Grants program.

Meanwhile, Secretary Decker says that North Carolina is being considered for several significant projects right now. The League, in early September, urged Governor McCrory to call a special session to address economic development and to have legislators reconsider the extension of film and historic preservation tax credits. At that time, League Executive Director Paul Meyer wrote to the governor that job creation required bold action. Other local government officials and local Chamber of Commerce officials also called for a special session, but the governor decided then that no consensus existed among legislators. Read more about the governor's most recent thoughts about a special legislative session here.

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Municipal Voters Approve Bond Projects

In last week's election, voters in Raleigh, Winston-Salem, Hickory and Wake Forest approved local bond issues for a variety of improvements. In Raleigh, a $92 million bond will go toward improving parks and recreation. In Hickory, voters approved $25 million for street improvements and $15 million for economic development. Wake Forest voters agreed to $25 million for streets, greenways and parks.

Winston-Salem voters approved the largest amount, with five separate bond issues totaling $139 million going for a variety of projects. Winston-Salem officials will allow residents to track the progress of their spending with a program on its website showing the status of projects. The city also plans to appoint a citizens committee to oversee the spending. Read more about the plans in Winston-Salem here.

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Regulators Approve Changes to Surface Water Quality Standards

Acting in support of one of the League's top regulatory goals, the N.C. Environmental Management Commission (EMC) voted Thursday to approve the long awaited amendments to the state's surface water quality standards -- a rulemaking process known as the "triennial review." The League filed comments in August in favor of the proposed changes, specifically supporting changing the standard for hardness dependent metals from "total recoverable" to "dissolved" and the retention of action levels. The League also requested the addition of a water-effect ratio, which was added in the approved amendments.

The League membership selected the triennial review as one of its top regulatory goals because of the impact the standards have on wastewater treatment costs, as well as on the growth of business and industry in communities. The triennial review is a process mandated by the federal Clean Water Act that directs states to review their surface water quality standards every three years. A highly technical scientific process, the review accounts for updated toxicological studies and other research regarding the aquatic health of surface waters.

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Mayor Phillips Among Infrastructure Commission Appointments

Jacksonville Mayor Sammy Phillips has been appointed to a legislative study commission that will examine the state's building  and infrastructure needs. Mayor Phillips' appointment to the Blue Ribbon Commission to Study the Building and Infrastructure Needs of the State was for a designated seat appointed by the House Speaker based on a recommendation by the League. Other appointments made by House Speaker Thom Tillis are Rep. Dean Arp (co-chair), Rep. Davis Lewis, Rep. Tim Moffitt, Paul Boney, Neil Deans and Pamela Townsend. Congratulations on the appointment, Mayor Phillips!
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Congressional Staffs Like Uber

The Washington Post's Wonkblog is suggesting that stringent regulation of ride-sharing services like Uber could face hurdles for a very interesting reason: their popularity among congressional staffs and campaigns. The newspaper cited data from campaign finance report filings to show that congressional campaign staffs are now utilizing Uber more often for trips under $100 than they are using taxis or other car services.

That fact won't prevent the General Assembly's Revenue Laws Study Committee from examining regulation of the ride-sharing services. It plans to report back to the full General Assembly on the matter next year. The Wonkblog piece also makes clear that state and local governments are most likely to decide about regulation of ride-sharing services. Read previous League coverage about ride-sharing regulation here. See the Wonkblog piece here.

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Five NC Cities Make List for Veterans

The financial website WalletHub used the occasion of Veterans Day to compile a listing of the best cities for veterans, and five in North Carolina made the list. Raleigh came up ninth on the list, while Durham was 36th, Greensboro 54th, Winston-Salem 56th, and Charlotte 67th. In putting together the ranking, WalletHub considered housing affordability, proximity to Veterans Affairs facilities, the number of homeless veterans, and employment opportunities. See the full rankings and an interactive map here.
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Boehner Vows to Stop Internet Sales Tax Legislation

In the aftermath of the elections, U.S. House Speaker John Boehner is vowing to block passage of federal legislation designed to facilitate the collection of online sales taxes by the states. Supporters of the Marketplace Fairness Act had seen the lame-duck session of Congress as a prime opportunity to finally see passage of the legislation. A Boehner spokesman, though, recently remarked that it would not move forward this year.

Supporters of the legislation are not throwing in the towel. They have been pushing a deal that ties passage of the legislation to a proposal to make permanent a temporary federal ban on Internet service access taxes. Read previous League coverage here. The Hill recently reported on Boehner's remarks in this article.