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League Bulletin

May 29, 2015

Over the past few months, League members have lobbied legislators, meetings have been held across North Carolina, and newspapers have written countless stories regarding the need that cities have for revenue options as the pending repeal of the business privilege license tax looms. With June approaching, please use this weekend to contact your legislators to again let them know about the effects of this $62 million fiscal cliff on your city or town. Tell them about service cuts or property tax hikes being considered to make up for this revenue loss, and let them know about other revenue challenges facing your community.

The League has suggested numerous revenue options for the legislature to choose from, including a municipal-only sales tax. The Senate is set to wrap up its budget soon and the total budget may be final by the end of June. Cities and towns are not asking for an appropriation from the state, but simply for the financial flexibility to avoid placing more financial pressure on their property tax bases.

If you have not spoken to your legislator about the need for revenue options for cities, please do so. If you have, now is the time to contact them again and engage others whom they know to make the case for cities and towns. Let them know that modest property taxes are critical to attracting industry and jobs. Remind them of the commitment that legislative leaders made during last year’s legislative session, publicly and to Gov. Pat McCrory, to address the loss of revenue. If you need copies of proposed ideas for revenue options for cities, please contact me and I will give those to you so that you can share them with your legislators. Contact: Rose Vaughn Williams

Two Charlotte-area mayors made a push this week for legislators to incorporate League-supported modifications to SB 25 Zoning/Design & Aesthetic Controls. As reported in this Charlotte Observer article yesterday, Matthews Mayor Jim Taylor and Pineville Mayor Jack Edwards made the case for allowing cities to retain the ability to implement building design standards in certain cases, such as infill development or existing neighborhoods where no private covenants are in place. House members will consider these issues during debate of SB 25, which passed the Senate last month and now awaits a House committee hearing. 

Rep. Bill Brawley, a Mecklenburg County legislator and co-sponsor of the House companion bill, told the Observer that he would seek to amend the Senate bill as requested by the mayors. The League appreciates Rep. Brawley's support of this compromise language, which would still prohibit cities from dictating design elements such as the color of a home, placement of a garage, or type of exterior building material, for most new single-family construction. League members prioritized a compromise on this issue as a Municipal Advocacy Goal this session, and numerous media outlets have examined both sides of this issue in recent weeks (read more in this article from last week's LeagueLINC Bulletin). Contact: Erin Wynia

Senate budget subcommittees received spending targets and timelines this week, with the Senate's budget calendar indicating that the chamber intends to give final approval to its budget on Thursday, June 11. According to the calendar, that would set up a two-week conference process with the House, allowing both chambers to pass an agreed-upon budget by June 30. Many legislative observers would be surprised if a budget agreement was reached that quickly. The Senate has already indicated that its budget would look markedly different than the House's version. Chief Senate budget writer Harry Brown told WRAL that the Senate's version would increase spending from the current budget by approximately 2.75 percent, while the House's budget increased spending by closer to 6 percent. In addition to ideas like further tax cuts and funding for Medicaid reform that have been discussed by Senate leaders, budget documents distributed this week also indicated that the Senate would be reviewing all transfers of money out of the Highway Fund to pay for non-Highway Fund programs. Contact: Chris Nida

This week, the U.S. Environmental Protection Agency (EPA) and Army Corps of Engineers (Corps) announced their final rule to clarify the jurisdictional reach of the Clean Water Act (CWA). As indicated earlier this year, the final rule exempts both stormwater control features (created in dry land) and some ditches from the definition of “waters of the United States.” These changes align with a League-approved federal advocacy goal and filed legal comments that called for clarification of the EPA's proposed definition and specifically requested the exemption of human-made ditches and Municipal Separate Storm Sewer Systems (MS4s).

In the final rule, the ditches exempted from the rule include those: 

  • with ephemeral flow that are not a relocated tributary or excavated in a tributary;
  • with intermittent flow that are not a relocated tributary, or excavated in a tributary, or drain to wetlands;
  • that do not connect to a traditional navigable water, interstate water, or territorial sea either directly or through another water, regardless of flow.

Clean Water Act jurisdiction is an important issue to cities because it triggers CWA regulatory actions, such as permitting, that apply to projects that cities undertake such as road-building and construction of water, wastewater, and stormwater infrastructure. The rule will be effective 60 days after publication in the Federal Register, barring any congressional action to prevent the rule. Contact: Sarah Collins.

Following the lead of the House, the Senate this week approved legislation that would make graffiti vandalism a felony for repeat offenders. Because the Senate made a slight change to HB 552 Graffiti Vandalism, ensuring that an offender not face a felony for separate acts occurring at the same time, the legislation now goes back to the House. Sen. Tom Apodaca of Hendersonville said the legislation came at the request of the Buncombe County District Attorney's office. Asheville is among the cities where graffiti vandalism has become rampant. Read news coverage about the legislation here and here.

The League will host the fourth in a series of regional meetings examining the future of municipal finance on June 15 in Greenville. The series, A Path Forward: Vibrant Cities Today and Tomorrow, has focused on the financial challenges faced by North Carolina cities and towns against a backdrop of policy changes from Raleigh and population shifts throughout the state. Previous meetings have been held in Southport, Burlington and Pineville.

This fourth meeting will take place from 10 a.m. to noon, and will include a presentation on the history of municipal finance examining recent tax policy changes and comparative data with other states. A panel discussion examining the individual challenges of municipalities in the region will follow. Please join us for this important meeting as legislators continue to examine proposals critical to municipal finance and revenue streams. The meeting is free of charge, and you can learn more about the event and register here. Contact: Scott Mooneyham

Gov. Pat McCrory is again pushing legislators to approve his $3 billion bond package, much of it focused on transportation investment in the state. The Governor and former State Budget Director Art Pope met with Republican legislators on Wednesday to advocate for passage of the  bond proposal. The governor has indicated that polling data, expected to be released soon, shows public support for the bond plan. So far, legislators have not taken up proposal. Some GOP legislators have indicated that they do not favor such a large borrowing package, while others have suggested any bond referendum should go before voters in 2016 rather than during off-year municipal elections. Governor McCrory's plan supports League-approved Municipal Advocacy Goals calling for more investment in transportation infrastructure. Read media coverage about the latest on the bond plan here and here.