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League Bulletin

June 26, 2020

​WHAT HAPPENED: Last week, we quoted legislative leaders eyeing adjournment of the 2020 session by today -- but no guarantees. Indeed, the lights remain on. Lawmakers plan to hold skeletal sessions until July 11, runway for matters that might come up in the coming days, like vetoes of bills they’ve sent the governor. An adjournment resolution also looks to a September session. 

WHAT IT MEANS: Because the General Assembly desired a wrapup of priority business this week, the chambers packed in a lot, holding session until the early morning hours, not unusual for these scenarios. The League is analyzing legislation of interest to cities and towns and will inform members when that is substantiated. But among important approvals was a bill, which we’ve fleshed out below in this Bulletin, to guarantee municipalities 25 percent of the $300 million set aside in CARES Act dollars for local governments.

ON TAP: A resolution approved by the House and Senate would put them into adjournment until Sept. 2 -- no sine die expected before then. At that time, they could consider bills regarding federal funds the state has received regarding COVID-19 response.

THE SKINNY: As the General Assembly took action benefiting municipalities when it comes to sharing of CARES Act funding, NCLM and the National League Cities continued efforts to gain congressional support for additional and direct funding to address tax and utility revenue shortfalls caused by the pandemic. That campaign remains alive and at media attention. Read on for updates on that and more news for municipalities from a very busy week.


​As the legislative session rolled to a temporary conclusion, state lawmakers approved a bill that will guarantee that municipalities receive 25 percent of the $300 million set aside in CARES Act dollars for local governments. Approval of HB 1023 Coronavirus Relief Funds/Additions and Revisions came after legislators had previously sent $150 million of the $300 million to county governments with language that encouraged them share money with municipalities but did not require it. Reports to the state indicated that about 25 percent of counties had not agreed to share any of those dollars with municipalities within their borders. HB 1023 does not set out any parameters for how counties must share those federal dollars, but will require that 25 percent be shared with cities and towns, meaning a total $75 million will be guaranteed for that purpose.

The legislative action followed meetings between NCLM leadership and House Speaker Tim Moore this week and Senate leader Phil Berger last week. While CARES Act dollars have, to date, been restricted to direct COVID-19-related expenses, it is important to know that U.S. Treasury guidance has loosened some restrictions that likely affect municipal governments, particularly as it affects spending on law enforcement and other public safety salaries. Guidance released this week also included the use of those dollars, in some instances, for matching money for FEMA relief. The U.S. Treasury Department has currently pulled some of that guidance from its website, but as it updates and adds to it, that information can be found hereThe N.C. Pandemic Recovery Office is also assisting local governments in determining eligible expenses. You can find further information about reimbursement of first responder salaries on page 5 of this document from the state office.

​As the General Assembly took action benefiting municipalities when it comes to sharing of CARES Act funding, NCLM and the National League Cities continued efforts to gain congressional support for additional and direct funding to address tax and utility revenue shortfalls caused by the pandemic. Over the weekend, this op-ed appeared in the Greensboro News & Record making the case for the needs of cities and towns in the wake of the disruption of economic activity due to COVID-19. The opinion piece -- from Mayors Neville Hall of Eden, Jay Donecker of Reidsville and David Myers of Madison – notes the uncertainty facing municipal governments as they attempt to move forward. “In the upcoming fiscal year, our municipalities may reduce investments in infrastructure to try to plan for this uncertainty. That will mean economic development projects delayed or lost. Planning for future projects will likely be approached cautiously to be fiscally responsible and ensure that funding is adequate for critical services like public safety,” the mayors write. “Meanwhile, if cuts to services like recreation and senior care occur, our citizens’ physical, social, and economic well-being will be hurt.”

This op-ed from Oxford Mayor Jackie Sergent made a similar case, noting that, “Cities and towns face this crisis with control over only one primary source of revenue — property taxes …But the last thing that local governments need to be doing now is increasing property taxes and passing along revenue shortfalls to residents and business owners who are struggling to make mortgage or rent payments. That would be not only cruel and akin to trying to squeeze blood from a turnip, but ultimately economically self-defeating. We need to be a resource for our constituents.” Meanwhile, mayors across the state continued organized letter-writing to congressional representatives letting them know of the financial issues that they face.

In Washington, Congress was preparing for a summer break amid speculation that it might take up a new round of federal relief – which could include direct assistance to municipalities – in late July. NLC released survey results showing that many municipalities across the country are preparing to delay infrastructure projects as a result of pandemic-caused revenue shortfalls. Advocacy materials showing those results can be found here and here. Also, the League has created a resource page where you can find N.C.-focused materials to make the case for revenue replacement, as well as news coverage, at Let’s keep making that case so that municipalities can continue to help drive economic recovery!

​Sales tax revenues from sales in the month of April were down more than $40 million statewide across all local governments, according to data shared by the Department of Revenue this morning. Taking into account declines in March revenues as well, local government sales tax revenues for March and April are $65 million below the same months in 2019. Analysis of sales tax and other key revenues from the third quarter of the current fiscal year is now available in the League’s latest quarterly Revenue Report . An interactive version allowing you to drill down on the available data can be found here, and a PDF report is available here. All of the League’s revenue-related information can always be found here. This report generally covers the first quarter of the calendar year (which is the third quarter of the local government fiscal year), and for sales taxes is based on sales made in January, February, and March. Check back with the interactive version of the report next week, as we plan to incorporate April’s data to bring you the most up to date analysis of this major revenue source.

​Face coverings are now a requirement in public places, statewide, in an effort from the governor’s team to decrease the spread of respiratory droplets and risk of COVID-19. Gov. Roy Cooper this week announced a new executive order, EO 147, extending the current Safer at Home phase of public restrictions through 5 p.m. July 17, with his team pointing to data showing that the coronavirus numbers are far too worrying to relax policy. The new executive order, issued on Wednesday, “strongly recommends” two years of age as the starting point for mask-wearing.  

In the same general conversation, the governor last week vetoed a bill from the General Assembly to reopen gyms and bars. The General Assembly subsequently held a vote to override the veto this week, but it failed. Legislators followed up with additional reopening bills. 

A press release from Governor Cooper’s team on the new executive order details the public health data points they’ve worked with in their decision making. It also quotes individuals from the healthcare field. “As the leader of the state’s largest health system, I am pro-health and also 100 percent pro-business. In fact, the two are inextricably connected and I’m very proud of the way business leaders and health experts are working together to keep our economy strong,” the release quotes of Eugene A. Woods, president and CEO of Atrium Health. “Medical science says to reduce the spread of COVID-19 masking works, and my sincere hope is that all the people of North Carolina can join forces to make wearing a mask not something we feel we have to do – but something that we want to do to keep each other, our neighbors, our children and our loved ones healthy and safe.”  

The state has released a FAQ document to help with the fine points of EO 147. 

​Lumberton Council Member Owen Thomas, a member of the League’s Board of Directors, has received an appointment to the North Carolina Housing Partnership. The appointment from Senate leader Phil Berger follows a recommendation from League Executive Director Paul Meyer. The Partnership carries out the business of the N.C. Housing Trust Fund, which is appropriated by the General Assembly and is the largest financing source for supportive housing and necessary improvements. The 13-member body includes the state’s commerce secretary and state treasurer. The General Assembly appoints most members, including one reserved for the League. Jacksonville Mayor Pro Tem Michael Lazzara, a past League president, previously served on the Partnership.