Skip Ribbon Commands
Skip to main content

League Bulletin

August 14, 2015

This week, League officers sent a letter to legislators asking again that they consider policy solutions that will benefit all North Carolina cities and towns, and that they do so by providing municipalities with revenue flexibility in the face of recent revenue losses. As you know, the state Senate has approved legislation that would reallocate sales taxes, a change that would benefit some local governments while harming others. The fate of that proposal is as yet unknown, but the discussion – as legislators attempt to reach final agreements on finance and budget issues – still affords the opportunity for the General Assembly to address the needs of cities and towns.
Now is the time to again contact your legislators to let them know about the effects on your city or town regarding the repeal of the privilege license tax, the building inventory changes restricting property tax collections, and the need to provide cities with revenue options and flexibility to be able to respond to these losses. Let them know that cutting services and putting increased pressure on the property tax base will not encourage economic growth. The letter from League President Ronnie Wall, First Vice President Lestine Hutchens, and Second Vice President Bob Matheny lays out potential options to provide cities and towns with revenue flexibility, and includes draft legislation (see links below). It asks that the General Assembly consider these options as critical finance decisions are made, noting that they would give municipalities financial flexibility but are not mandates that would force their use.

“We want to provide the services that people who live in cities need and expect, but also build the infrastructure and offer the investments that grow our economy and create jobs. Cities are not looking for a handout. We are looking for a partnership,” the letter states. League members and staff have lobbied legislators throughout this legislative session regarding revenue proposals for cities and have reminded legislators that they committed to considering them when passing legislation repealing the privilege license tax last year. Legislators now are entering into the negotiations where they are most likely to re-examine these issues and take up the call to provide cities and towns with revenue options. Please contact them again and engage others whom they know to make the case for cities and towns. If you would like more information regarding the proposals or assistance contacting legislators, please contact me.
You can read the full letter sent to legislators here. The draft bill proposals provided with that letter can be found here and here.

League members were a noticeable presence at the Legislative Building this week as action continued around HB 117 NC Competes Act. The Senate passed the revised sales tax reallocation plan this week in a 34-12 vote, and then had local government officials supportive of the plan attend a rally in front of the Legislative Building. That same day, a group of municipal and county officials from Carteret County, which would lose revenue even under the revised plan, met with legislators including the bill sponsor, Sen. Harry Brown, to discuss their opposition.

The latest version of the Senate sales tax reallocation plan would distribute locally-authorized sales taxes back to counties and the municipalities in them on a 50-50 per-capita and point-of-purchase basis. The bill represents substantial movement from earlier versions that would have distributed local sales taxes either wholly or mostly on a per-capita basis, but would still mean revenue losses for urban and tourist counties. Currently, 75 percent of sales taxes are distributed to counties on a point-of-sale basis, while 25 percent are returned on a per-capita basis.

Besides sales tax reallocation, the bill includes provisions providing business recruiting incentives that are key to bringing jobs to the state. The provisions address a League Municipal Advocacy Goal. Senator Brown has noted his work with the League and other groups in the revisions to the plan, and League members and staff continue to discuss revenue options for municipalities as a part of those discussions. (See above.)

We want to thank all League members for their contacts with legislators on these crucial revenue issues. Also, thanks to Senator Brown and to the number of legislators who have recently agreed to sit down with municipal officials from across the state to discuss the effects of the plan. You can read media coverage about the week's events here. This video from the NC Insider focuses on Wednesday's activities surrounding the plan and features Greenville Mayor Allen Thomas. Contact: Rose Williams

The House and Senate this week approved a continuing budget resolution to keep funding state operations through Aug. 31, giving themselves an additional two weeks to reach a budget agreement. The previous continuing resolution, passed just before the July 1 start of the fiscal year, was set to expire today. Only two House members voted against the new continuing resolution, but the issue was more contentious in the Senate. Sen. Tom Apodaca spoke against the measure, saying legislators had had long enough to discuss the budget and that the budget uncertainty was hurting school districts. In the end the Senate approved the continuing resolution by a vote of 33-9. Yesterday afternoon, Speaker of the House Tim Moore told WRAL that the House and Senate were close to agreeing on a total spending number for the budget and he was optimistic a budget could be passed before the Aug. 31 deadline. Rep. Chuck McGrady, one of the chairs of the House Appropriations Committee, indicated that he would be spending the weekend in Raleigh working on the budget. Contact: Chris Nida

Governor Pat McCrory rallied supporters of historic preservation tax credits before the State Capitol on Wednesday, while Senate leader Phil Berger suggested there may be movement on the issue. Governor McCrory, speaking to about 125 people, said conservatives and liberals alike should agree that the tax credits encouraging private investment in historic buildings are good for Main Street economic development across the state. He  was joined by Secretary of Cultural Resources Susan Kluttz and other cabinet officials, along with several legislators. Several municipal officials were among the crowd of supporters.

In her remarks, Secretary Kluttz noted the League's work with her office and the McCrory administration in promoting the importance of the historic tax credits. The tax credits expired in December, and the House has passed both separate legislation, HB 152 New Historic Preservation Tax Credit, and a provision in its version of the budget that would restore an historic tax credit. Rep. Stephen Ross, a primary sponsor of the bill, also spoke at Wednesday's event.

Although Senate leaders have opposed bringing back the credits, Senate leader Phil Berger told the N.C. Insider this week that they are not dead this session and will be a part of budget discussions. The restoration of the tax credits are a key League legislative advocacy goal. The League thanks the governor, Secretary Kluttz, Representative Ross, and all legislators for continuing to examine the importance of the tax credits to economic development efforts in towns and cities across North Carolina. We also want to thank League members for their work in promoting the issue, contacting legislators, and helping Secretary Kluttz in her tour of historical properties. Read media coverage of the event here and see a video from the governor's office here. Contact: Scott Mooneyham

The House and Senate gave their OK this week to final legislation that will extend the time for local governments to develop back-up 911 center capabilities. The approval of the conference report to HB 512 Amend/Clarify Back-Up PSAP Requirements means that funding cannot be withheld for 911 call centers as long as local governments can show substantial progress is being made in developing back-up capabilities for primary 911 centers, or public safety answering points (PSAPs). The progress would have to be shown by July 1, 2016.

The bill now goes to Gov. Pat McCrory to be signed into law. Last year, the League successfully blocked language in a bill that could have forced municipalities to build costly new facilities in order to demonstrate back-up capabilities for 911 centers. The conference report did remove from HB 512 a provision that the League worked hard to have added in the Senate, which would achieve a top League legislative priority by preventing municipalities from being additionally charged for county services when those services are already funded through county property taxes.

After working with the League and other stakeholders, the conferees determined that there were too many questions to keep the provision in the final recommended version. Fortunately, this allows the League to continue to seek legislative action on HB 730 County Provide 911 Dispatch Services, which passed the House unanimously in April and would achieve the same goal. The League thanks Rep. Jason Saine, Rep. Susan MartinSen. Louis Pate and the other conferees for working on these important provisions and seeking the League's feedback. Contact: Sarah Collins

After passing the Senate in late July, statewide regulations for ride-sharing companies such as Uber and Lyft advanced out of the House Transportation Committee this week. Among other things, SB 541 Regulate Transportation Network Companies would place insurance and driver background check requirements on ride-sharing companies, and prevent airports from precluding ride-sharing companies from operating there. The statewide regulatory scheme would only apply to "Transportation Network Companies" (TNCs), which the bill defines as those that use an online-enabled application or platform to connect passengers with drivers.
While the bill prevents local governments from imposing additional requirements on the TNCs, legislators worked with city officials and other stakeholders to achieve a statewide regulation system that will benefit cities and their residents. Rep. Bill Brawley even noted in committee that although the bill was initially drafted to prevent cities from regulating TNCs, cities have been part of reaching this "good compromise." The League thanks bill sponsor Sen. Floyd McKissick and Rep. Bill Brawley for their hard work. The bill now heads to the House Finance Committee. Contact: Sarah Collins
Cities stand to lose tens of millions of dollars statewide with the passage this week of HB 168 Exempt Builders' Inventory, which Gov. McCrory received for his signature today. The bill, which allows builders a property tax exemption on improvements to their properties for a period of time or until the property is sold, comes on top of an estimated $62 million loss for cities with last year's repeal of the privilege license tax. The bill was approved even though League members and staff, throughout the committee-vetting process, made the point that city services, including police and fire protection, would have to be provided to developing subdivisions and other unsold, newly-built homes. The governor has 10 days to sign the builder's tax exemption into law or let it become law without his signature. The bill passed both the House and Senate with near-unanimous votes; read more details about the bill in last week's LeagueLINC Bulletin. Contact: Chris Nida
The House and Senate this week gave final approval to legislation intended to prevent the disclosure of law enforcement officers' home addresses or other personal information that might subject them and their families to harm. SB 699 Protect LEO Home Address/Other Information would prohibit the public disclosure of law enforcement officers' home address, emergency contact information or other personally identifying information. The bill now goes to Gov. Pat McCrory to be signed into law.
The House has approved legislation that could move local government and state agencies a step closer to flying drones. SB 446 Dealer Loans/Unmanned Aircraft/Brunswick Co. was approved by the House 106-4; the Senate will now consider House changes. Public and private drone flights are still prohibited under most circumstances by federal rules, but states have been passing laws in anticipation of FAA rules that would open the skies for more of the planes. SB 446 would give the state's chief information officer more authority to approve the unmanned aircraft for uses that include law enforcement and emergency management. Read more about the bill here.