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 May 29 

This week's developments

Sales tax collections forecasted down for FY 2009-10

The revenue forecasters in the Offices of State Budget and Management and the legislative Fiscal Research Division have revised their forecast for sales tax revenue in FY 09-10 downward. The forecasters now project that sales tax revenue in FY 09-10 will be down 4 percent from FY 08-09, whereas they previously predicted that FY 09-10 would be at the FY 08-09 level. You should take this revised forecast into consideration when adopting your FY 09-10 budget.

In addition, the Department of Revenue has alerted us that the June distribution of sales taxes will be significantly lower than last year's June distribution. From January to March of this, year the department delayed the processing of all tax refunds due to the state's cash management concerns. The department caught up on sales tax refunds in April and as a result, the June distribution reflects 3-4 months worth of refunds. The Department will send a notice further explaining this issue prior to the distribution.

Objections to ABC store locations

Gov. Beverly Perdue has signed into law HB 186 -- Local Government Objections to ABC Stores. This bill, which is on the League's advocacy agenda, prohibits a local ABC board from locating an ABC store in a municipality if the municipality adopts a resolution objecting to the location, based on information and evidence presented to governing board at a public hearing. The ABC board, however, may ask the state ABC Commission to approve the location despite the municipality's objection.

House busy with budget

House committees are expected to complete their work on the 2009-2011 state budgets perhaps as early as next week. The Senate previously adopted its version, but the House is dealing with balancing the budget with the latest revenue estimates being significantly lower than estimates used by the Senate. Published reports say that lawmakers are discussing deep cuts in education programs and Medicaid funding cutbacks. We will continue to closely monitor for any proposals impacting municipalities.

HB 120 – Public Municipal Campaigns

Discussion of HB 120 – Public Municipal Campaigns on the Senate floor was postponed and now is set for next week. This bill authorizes a pilot for publicly financed municipal election campaigns and makes Chapel Hill and any municipality with more than 50,000 populations eligible to apply for the pilot with selection by the State Board of Elections.

Property tax break for seniors' cars

House Committee on Aging has given a favorable report to HB 1547 – Senior Automobile Property Tax Exclusion Bill would provide a property tax exemption on the first $2,000 of the value of one motor vehicle owned by a low-income senior citizen. Bill now goes to the House Finance Committee.

Prop 13 Legislation held in committee

HB 1130 – Senior Prop 13 Property Tax Relief – was heard in the House Aging Committee, but was not voted on, with most committee members questioning why a taxpayer would be entitled to property tax relief solely based on age (over 70). The League opposes this bill.

E-911 Expanded Use defeated in committee

An amendment which would have expanded permitted uses of 911 funds by local governments failed in the Senate Commerce Committee. An amendment to HB 1180 (Consumer Choice and Investment Act of 2009) would have allowed all public safety answering points (PSAPs) to purchase radio oriented equipment to supplement existing 911 functionality, but the amendment failed on a 10-9 vote.

Notice on zoning amendments

The House Ways and Means Committee gave a favorable report to SB1027 – Zoning Change/Property Owner Notice, which has already passed the Senate. This bill requires that if an applicant other than the property owner applies for a rezoning, the applicant must certify that the property owner of the land has been notified of the zoning map amendment and public hearing. Does not apply to city-initiated zoning map amendments. Bill referred to House Judiciary II Committee.

Incentives for energy consumption reduction

The House has passed SB52 – Various Localities Energy Development Incentives authorizes counties and municipalities to adopt ordinances to grant a density bonus, make adjustments to otherwise applicable development requirements, or provide other incentives to a developer or builder if the developer or builder agrees to construct new development or reconstruct existing development in a manner that the county or municipality determines makes a significant contribution to the reduction of energy consumption.  Local bill made statewide and passed House.  Returns to Senate for concurrence.


Federal Stimulus Spotlight

Community Development Block Grant (CDBG) deadlines:

Application information for the state's non-entitlement CDBG funding will be available today at The program, administered by the N.C. Department of Commerce's Division of Community Assistance (DCA), received $12 million in ARRA funding. Applications are due by June 12, 2009.

Due to the short turn-around time on these non-entitlement CDBG applications, the League urges non-entitlement cities to revisit prior unfunded applications for submission, noting whether those projects fit ARRA criteria. DCA encourages applications that would fund (1) infrastructure providing basic services to residents or (2) activities promoting energy efficiency through rehabilitation or retrofitting of existing buildings. DCA has proposed to allocate $3 million of its allocation for housing, $5.87 million for infrastructure, $2 million for special projects, and the remainder for administrative cost.

Water/sewer program deadlines

Water and sewer program applicants whose projects appeared on the State of North Carolina's Intended Use Plan (IUP) and did not receive funding in the first round of ARRA funding awards have until June 3, 2009 to submit their full applications to the N.C. Department of Environment and Natural Resources (DENR). Two programs received ARRA funding: the Drinking Water State Revolving Fund and the Clean Water State Revolving Fund. In February, both programs solicited projects to be listed on the IUP. Only projects listed on the State IUP are eligible for funding, and only after applicants submit a full application to DENR.

NC American Recovery and Reinvestment Act (ARRA) reporting guidance online

The N.C. Office of Economic Recovery & Investment has issued a series of memos to guide the reporting of ARRA funds received.

Get updated ARRA information

The UNC-Chapel Hill School of Government has established a listserv for elected and appointed officials to share ARRA information. To register for the listserv, please visit


Regulatory Update

Water Shortage Response Plan webinars and workshop

The League has joined the N.C. Department of Environment and Natural Resources, Division of Water Resources (DWR) to offer training and assistance for communities in preparing their Water Shortage Response Plans (WSRP). These plans are required of all local water supply systems and are a result of last year's drought legislation.

Even if you have already submitted a WSRP to DWR, the League urges you to participate in one of the training opportunities. DWR has not completed its review of all plans, and if a plan is disapproved, the repercussions are stiff. In times of drought, a local water supply system with a disapproved plan must follow strict state default rules for water use. There is still time to amend and re-submit a WSRP if necessary.

The remaining training calendar includes a webinar: Wednesday, June 3 from 2:00-4:00 p.m. Webinar participants will receive power point slides as an email attachment prior to the webinar. The other training will be an in-person workshop on Tuesday, June 2 from 10:00-3:00 p.m. at the Neuse River Wastewater Treatment Plant, 8500 Battlebridge Road, Raleigh. To register for any of the training opportunities, email Put "WSRP registration" in the subject line and include your name, system name, and date of the workshop.


Action Items

Contact your legislators in the next few days about these issues

The time has come - Support HB 727 / SB 472— Annexation Changes
Update: We anticipate legislative action on annexation within the next few weeks. Are legislators hearing from you? Please make a special effort this week to contact legislators and encourage city/town residents to voice their support for fair annexation by passage of HB 727/SB 472 – Annexation Changes.
What the bills would do: Enact 20 changes to address legitimate concerns of citizens while retaining fairness of annexation for in-town residents and annexation as tool for managing growth.
Sponsors: Reps. Love, Starnes, Allen, K. Alexander
Status: House annexation bills, including HB 727, are in House Judiciary II Committee. A new Judiciary II Chair to replace Dan Blue has not yet been announced. Senate annexation bills, including SB 472, are in Senate Finance Committee. The Senate Finance Committee has appointed an Annexation Subcommittee to deal with annexation bills.
Actions Needed:
1. Ask your legislative delegation for their support and work with them on any questions they have.
2. Contact members of the Senate Annexation Subcommittee to ask them to support SB 472.
Chair: Sen. Daniel Clodfelter (919.715.8331; Members: Senators Hartsell (919.733.7223, McKissick (919.733.4599, Purcell (919.733.5953, Shaw (919.733.9349, Stein (919.715.6400, and Stevens (919.733.5653
3. Contact members of the House Judiciary II Committee to ask them to support HB 727.
Vice Chairs: Reps. Glazier (919.733.5601, Love (919.715.3026; and Weiss (919.715.3010; Members:
Reps. Blackwood (919.733.5805; Bordsen (919.733.5820; Burr (919.733.5908; Crawford (919.733.5824; Folwell (919.733.5787; Hurley (919.733.5865; Jackson (919.733.5974; Johnson (919.733.5861; Jones (919.733.5825; Moore (919.733.4838; Parmon (919.733.5829; Rhyne (919.733.5782; and Spear (919.715.3029
4. Contact members of the House Finance Committee to ask them to support HB 727.
Senior Chair: Luebke (919.733.7663, Chairmen: Gibson (919.715.3007, Wainwright (919.733.5995,Weiss (919.715.3010, Vice Chairs: Hill (919.733.5830, Holliman (919.715.0873, Howard (919.733.5904, McComas (919.733.5786, Womble (919.733.5777 Members: K. Alexander (919.733.5778, Blackwood (919.733.2406, Blust (919.733.5781, Braxton (919.715.3017, Carney (919.733.5827, Cotham (919.715.0706, Faison (919.733.5749, Folwell (919.733.5787, Hall (919.733.5872, Hughes (919.733.5754, Jones (919.733.5825, Lewis (919.715.3015, McCormick (919.733.5654, McGee (919.733.5747, Owens (733.0010, Rhyne (919.733.5732, Ross (919.733.5773, Setzer (919.733.4948, Stam (919.733.2962, Starnes (919.733.5931, Tillis (919.733.5828


Oppose HB 750 / SB 427 - Restore Contract Rights to State/Local Government Employees
Update: Labor union supporters held a collective bargaining rally day on Tuesday, May 26, and the Senate State and Local Government Committee discussed SB 427 but took no vote.
What these bills would do: Repeal the long-standing prohibition against collective bargaining between cities and towns and public employees. Also ends the prohibition on payroll deduction for association dues collection if the association engages in collective bargaining.
Sponsors: Reps. Coates, Harrell, Glazier; Sen. Kinnaird
Status: SB 427 in Senate State and Local Government; HB 750 in House Judiciary II
Actions needed: Please contact your senators and members of the Senate State and Local Government Committee and ask them to oppose SB 427. We do not need an adversarial process to determine salaries, benefits and working conditions. Municipal officials take very seriously the responsibility to provide fair salaries and safe workplaces.


Bill summaries