House transportation leaders presented their most comprehensive proposal to stabilize transportation funding for the long-term to the House Transportation Committee on Tuesday. Sponsored by Reps. John Torbett, Frank Iler, Phil Shepard, and Paul Tine--all of whom also chair the House Appropriations Committee on Transportation--HB 927 Reestablish NC as the "Good Roads State" received mostly positive feedback from committee members. Importantly, two leading House budget writers, Reps. Nelson Dollar and Chuck McGrady, spoke in favor of this proposal. Along with a broad coalition of business and government partners, the League supports efforts to boost transportation dollars. The League does have concerns about HB 927 because it fails to tie Powell Bill dollars to proposed increases on vehicle and other related fees while reducing gas taxes that are tied to local transportation dollars.
This funding proposal would reduce the gas tax but raise fees such as one paid when vehicles are purchased. Of significance to cities, who count on Powell Bill disbursements to pay for maintenance and other road construction projects on municipal street networks, the bill would hobble future growth of this revenue stream by leaving it tied solely to the gas tax. The State, on the other hand, would see larger increased revenues over time due to the combination of gas tax growth plus growth attributable to the proposed fee increases. The League appreciates Rep. Becky Carney raising this concern during Tuesday's committee discussion, and appreciates the comments by Rep. Torbett made to address concerns over Powell Bill funding. The League also supports the short-term infusion of funding the proposal directs to cities for three fiscal years, to be used for road resurfacing. Because the committee only discussed the bill this week, it will need another hearing and a favorable vote to advance. Contact: Rose Vaughn Williams
The House's omnibus regulatory reform bill, HB 760 Regulatory Reform Act of 2015, passed the House Wednesday and now moves to the Senate. While much of the discussion and amendments related to the state's renewable energy program, changes to riparian buffer rules also became a focus of the debate. The bill sponsor, Rep. Chris Millis, offered an amendment to clarify that the riparian buffer provision did not affect a local governments' ability to use buffers to comply with total maximum daily loads (TMDL) or permits issued by the state, including National Pollutant Discharge Elimination System (NPDES) permits.
While this language is an improvement, Rep. Pricey Harrison noted that it may not address all municipal concerns, citing the League's comments in committee. As amended, this bill would still eliminate local governments' ability to implement stormwater programs that exceed the state's model stormwater ordinance and limit local governments' use of buffers for compliance with water supply watershed requirements or to implement the MS4 program including the post construction requirements.
Other provisions of the bill of interest to municipalities include:
The League will continue to work with legislators as the bill is considered by the Senate. Contact: Sarah Collins
Cities across the state are in the final stages of preparing their FY2015-16 budgets, and the pending loss of privilege license revenue is leading to a number of proposals for property tax increases and service cuts. Here are just a handful of examples:
When municipal privilege license authority was repealed last year, legislators and Governor Pat McCrory committed to the League that they would work on a source of replacement revenue before the beginning of the next fiscal year. To date, no such replacement revenue source has been identified. The League -- on behalf of its 540-plus member cities -- continues to push for more municipal revenue flexibility, including the 1/4-cent municipal sales tax option in HB 903 County Tax Flexibility/Municipal Rev Opts. Please continue to talk with your legislators about the importance of this municipal-only sales tax option as a needed way to stabilize municipal revenue sources. Contact: Chris Nida
State government is expected to see a $400 million budget surplus this fiscal year after April tax returns reversed an earlier trend of tax collections lagging behind projections. State budget officials attributed the surge in tax receipts to strong growth in business income and a sharper-than-expected decline in tax refunds. Republicans touted the news as evidence of success of the 2013 state tax reforms; Democrats said it showed more of the tax burden was shifted onto the middle class.
Much of the $400 million is expected to be used to shore up state government reserves. The revenue growth, though, also translates into new projections for the coming fiscal year that now show legislators with $1.1 billion in additional revenue availability. The news comes as House budget writers met behind closed doors this week ahead of plans to release that chamber's proposed state budget in two weeks. The state spending plan is expected to total about $22 billion. Read media coverage about the budget news here, here and here.