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League Bulletin

May 22, 2015

Early today, the House overwhelmingly approved its $22.2 billion budget plan for the coming fiscal year. The final 93-23 vote came at 1:15 a.m. and after the bill had been sent to the House Rules Committee on Thursday to make a few changes to try to broaden support. The changes included reducing proposed DMV fee increases, scaling back a proposal to expand film grants, and eliminating a research and development tax credit.

The result: a majority of Republicans and Democrats in the chamber voted to back the bill. The vote came after 61 amendments were considered on the House floor, with 48 approved. The bill would give a 2-percent pay increase to state employees and provide increases for public schools and the university system.

The budget bill contains several provisions important to municipalities. They include:

  • basing more transportation funding on DMV fees, with a cut to the state's gas tax on non-diesel motor fuels, a shift projected to cost cities and towns $7.7 million in Powell Bill funding for Fiscal Year 2016-17.
  • a provision requiring the state Department of Transportation to pay all or some of the costs when road state construction forces local utility line relocation in cities of 50,000 or less; this provision supports a 2015 Municipal Advocacy Goal.
  • $500,000 in additional recurring dollars and $11.5 million in recurring money to the Clean Water Management Trust Fund. The additional appropriation would bring total program funding for the biennium to $52 million. The separation of the National Heritage Trust Fund from the CWMTF would pull $750,000 from it.
  • $5 million for Water Resource Development projects, dollars that would be used around the state to match federal grants.
  • a $478,825 cut to the Drinking Water State Revolving Fund, leaving $4.5 million for the program.
  • $5.1 million for the Clean Water State Revolving Fund, enabling federal funds to be drawn down.
  • an additional $3.27 million in recurring dollars and $10 million in non-recurring for state water and waste water infrastructure grants. The money is part of $38.2 million in total funding for the purpose over the biennium.
  • $900,000 in additional non-recurring money for aquatic weed control.
  • $1 million for state matching grants for the Main Street Solutions program to providing planning for downtown revitalization.
  • an additional $500,000 in non-recurring funds for Grassroots Arts Grants, bringing total funding to $2.8 million.
  • the establishment of a $10 million, competitive library grants program in the Department of Cultural Resources.

Rep. Grier Martin of Raleigh unsuccessfully attempted to amend the bill to hold cities and towns harmless related to reductions in the gas tax and corresponding Powell Bill losses. The League would like to thank Rep. Martin for the amendment. Now that the bill has moved to the Senate, League staff will continue to work pursuing changes to protect Powell Bill funding. Read media coverage about the House budget plan here, here and here. Contact: Rose Vaughn Williams

Senate Majority Leader Harry Brown has indicated that a Senate proposal on business recruiting incentives is likely to begin moving through that chamber next week. Although the Senate has filed two bills dealing with incentives and tax changes, it is unclear what the latest Senate proposal may include. The House has already approved an incentives package, HB 117 NC Competes Act, that included several measures favored by Gov. Pat McCrory, with backing and support from the League. The Senate has not taken up the bill.

A League advocacy goal calls for the support of legislation "providing the funding for state-level incentive programs necessary to keep North Carolina competitive in its efforts to bring additional jobs and economic development to local communities." Meanwhile, economic developers from around the state came to the Legislative Building on Tuesday calling on legislators to put money into the depleted state Job Development Investment Grants program. Michael Smith, president of the N.C. Economic Development Association, said economic development projects around the state are being jeopardized by the uncertainty surrounding the program.

A provision added to the House budget plan during floor debate Thursday night would provide local governments with $5 million for matching grants to help pay for police body cameras. The amendment, sponsored by Reps. Charles Jeter of Huntersville and Ed Hanes of Winston-Salem, was approved 109-2. The provision would require that local law enforcement agencies provide $2 for each dollar provided by the state for the purchases. Individual law enforcement agencies could receive no more than $100,000 and would be required to have policies in place regarding the cameras' use. The League would like to thank Representatives Jeter and Hanes for sponsoring the amendment. Read more about the amendment and its passage here.

The House budget plan approved by that chamber this week would set aside $40 million for TV and film production grants, a measure intended to lure the productions to the state. The total would represent a significant increase over the $10 million appropriated for the grants for the first six months of the current fiscal year, but is less than the $60 million included in an initial version of the budget bill. The grant program was approved after legislators decided to allow a film tax credit to expire at the start of the calendar year. Film industry advocates hope the added money will help to reinvigorate TV and film production in the state, but also worry about the reception that the budget provision will receive in the Senate. 

The House provision would support a League advocacy goal of establishing "a competitive film incentive program and (preserving) the state historic tax credits." Read media coverage about the film grant proposal here. The House spending plan also includes the language previously adopted by that chamber in HB 152 New Historic Preservation Tax Credit, creating a revised state historic preservation tax credit. Contact: Scott Mooneyham

A city planner and the lead homebuilder industry lobbyist debated the merits of local residential building design standards on a ten-minute television segment Tuesday. Participating in the Time-Warner News 14 show "Capital Tonight," Rodger Lentz, City of Wilson Director of Planning and Development Services, spoke about the variety of reasons local governments use aesthetic-based design standards across the state. Most importantly, he stated that these locally-determined standards typically existed to protect the value of surrounding property owners, especially in older, existing neighborhoods that lack private aesthetic-based covenants.

"One of the number-one complaints we get is what's going on next door," Lentz told Capitol Tonight host Tim Boyum. "Homeowners moved into an area with an expectation that their neighbor's house is going to look the way theirs does. It's a protection of their investment in that property. Not every development has restrictive covenants."

In response, Mike Carpenter, Executive Director of the NC Homebuilders Association, said homebuyers should take care to buy homes in neighborhoods with private covenants. "If you want to be absolutely certain that someone doesn't paint their house purple with pink stars on it, you should move into a community that has covenants."

This segment built on other statewide media coverage of this issue in recent weeks, which came in response to the Senate's passage of SB 25 Zoning/Design & Aesthetic Controls late last month. The League suggested numerous amendments to that bill to ensure that cities retained the authority to enact building design standards for older, existing neighborhoods and infill developments. However, the Senate chose not to adopt any of those amendments. The bill now awaits House consideration and has been assigned to the House Regulatory Reform Committee. In advance of the House debate on this bill, please continue to give your representatives examples of how your town's standards preserve the property values of existing homes. For copies of the League-supported compromise language, please contact Erin Wynia.

The League's Government Affairs team was pleased this week to welcome Jonathan Meyer. Jonathan will be serving as an intern for the summer of 2015 and will be working most directly with League Director of Research & Policy Analysis Chris Nida. Jonathan (who shares a last name but no relation with League executive director Paul Meyer) comes to us from the Sanford School of Public Policy at Duke University, where he just completed his first year in the Master of Public Policy program. Prior to attending Duke, Jonathan earned a bachelor's degree from New York University and founded a nonprofit theater company that implemented after-school acting programs in inner city schools in New York City. He also received a bachelor's degree from the City University of New York, Brooklyn College, and worked on local and statewide political campaigns. We are happy to have Jonathan with us this summer and look forward to him meeting many of our members. You can email Jonathan here.

2015 League Government Affairs intern Jonathan Meyer

The U.S. Census Bureau released its estimates of 2014 municipal populations this week, and the numbers show that a majority of North Carolina's cities continue to add population as an increasing number of residents choose to live in incorporated areas. In 2010, just over 55 percent of North Carolina's residents were living in cities and towns. In 2014, that number was over 56 percent, as the state's cities have added more than 300,000 residents. In all, nearly 60 percent of N.C.'s 553 municipalities added residents between 2010 and 2014. Some of the state's largest cities were among the fastest growing cities nationally, as Cary (11th), Durham (12th), Charlotte (27th), and Raleigh (32nd) all had 2013-2014 growth rates that ranked them among the top 50 fastest growing cities with a population over 100,00 nationwide. Some smaller cities experienced even more robust growth, as both Rolesville and Holly Ridge grew by more than 50 percent from 2010 to 2014. For highlights of the Census data for N.C., see this summary from the N.C. State Data Center, and see the numbers for every N.C. municipality here. Contact: Chris Nida

Last week's third annual LAC Lobby Days proved to be a success, with Legislative Action Committee members meeting with a number of key legislators and legislative staff members to discuss critical municipal issues. On Tuesday, the General Government LAC met with legislators discussing concerns related to a municipal-only quarter-cent tax, sales tax redistribution and DOT utility line relocation, among other items. On Wednesday, members of the Tax & Finance LAC and the Planning & Environment LAC came to Raleigh to further discussions around those issue and also talk about legislation affecting county 911 charges, building design controls, and billboard regulation. The League would like to extend a special thank you to all LAC members who participated and to legislators and legislative staff for taking part in the discussions about critical issues affecting municipalities. Contact: Karen Waddell

The Senate Transportation Committee on Wednesday held a hearing but did not vote on HB 127 DOT Condemnation Changes, a proposal that would enhance awards for plaintiffs' attorneys in quick-take condemnation cases at the expense of taxpayers. The N.C. Department of Transportation (NCDOT) and local governments use the quick-take condemnation procedure to more quickly bring online public infrastructure such as roads, water and sewer, and airport projects, saving project costs. During the hearing, representatives of both the League and NCDOT spoke in opposition to the bill, pointing out the inherent tension between taking land for infrastructure, and at the same time, the need to compensate affected landowners for the use of their private property.

Many committee members acknowledged this tension during the committee discussion. In particular, Sen. Rick Gunn stated his discomfort with the premise behind the bill: that NCDOT deliberately undervalued land when conducting necessary condemnation proceedings. The League thanks Sen. Gunn and other committee members for similar comments. In addition, the League especially appreciates remarks by Sen. Ralph Hise, who pointed out that the bill would affect local government condemnations as well and that local effects should be included in any fiscal impact calculations. While the League appreciates bill sponsor Rep. Skip Stam's willingness to meet and discuss concerns regarding this language, the League continues to believe that the measure would encourage plaintiffs' attorneys to bring cases to trial, likely delaying needed infrastructure projects while running up legal fees. The bill must receive at least two favorable Senate committee votes before advancing further. Contact: Erin Wynia

After discussions with the League regarding a provision in SB 486 NC Trail Expansion/NC Economic Corridors detrimental to municipalities, the bill's sponsors agreed to drop the provision before the bill received committee approval Wednesday. The provision that was dropped would have limited the ability of some local governments to comply with stormwater control mandates.  The League thanks bill sponsors Sens. Andrew Brock, Tamara Barringer, and John Alexander for recognizing cities' concern and removing that provision. Overall, the League supports the intent of the bill, which would spur development of recreational trails statewide by creating a trust fund to assist with completion of the Mountains-to-Sea Trail, including connections of municipal trails into that system.

As part of the goal to build out these trails more quickly, the original version of the bill would have prohibited all state and local government environmental regulation of trail construction and maintenance, unless required by federal law. This provision would have meant that many local governments could not comply with state sedimentation and other stormwater control mandates. In addition to removing that provision, the revised version of the bill also included a new proposal to exchange state property located near Umstead State Park in Raleigh with property currently held by the Raleigh-Durham Airport Authority. Contact: Sarah Collins

Apparently not all developers dislike municipal protest petitions. The Charlotte Observer reports that two prominent developers in the Queen City, Cameron and DeeDee Harris, have filed a protest petition in opposition to a planned mixed-use development adjacent to two retail buildings which they own. The House approved HB 201 Zoning Changes/Citizen Input, which would eliminate the protest petition process, back in March; the Senate has yet to take up the bill. Reforms supported by League members call for changing the thresholds under which a valid protest petition could be filed and upheld, increasing the percentage of surrounding property owners required for the filing, and lowering the supermajority council vote to uphold the petition. Read previous League coverage here.
Nancy Barwick Wilson, the widow of longtime League Executive Director S. Leigh Wilson, passed away Monday after a long battle with Parkinson's disease. She was living at the Springmoor Retirement Community in Raleigh at the time of her death. Mrs. Wilson, who was 93, had worked at both the N.C. General Assembly and for the Episcopal Diocese of North Carolina. The League extends condolences and regards to her family. Read her full obituary here.