House, Senate trade barbs over tax bill

Posted July 1

Legislative Building

— The strains of the end of a contentious session were on display Friday morning as a House Finance Committee meeting turned into a full-on House revolt against Senate leaders.

Senate Bill 46, sponsored by Senate Majority Leader Harry Brown, R-Onslow, would allow Jacksonville to change how its occupancy tax revenue could be used. Jacksonville, Brown said, wants to use its revenue to build a sports complex that could host tournaments and bring in additional visitors.

Under a House Finance rule - a rule that the Senate does not have - 2/3 of occupancy tax revenue must be used only for tourism promotion, while 1/3 can be used for tourism-related expenses. Brown's bill would reverse that for Jacksonville.

Rep. David Lewis, R-Harnett, admitted the measure doesn’t follow House guidelines, but he said it was brought to the committee at his request because Brown had helped many members of the committee "move bills that otherwise wouldn’t have moved."

Brown told the committee an exception was warranted because it would allow Jacksonville to build an attraction to drive tourism. He added that, if they wouldn’t consider bending the rules, the Senate might decide not to take up any House occupancy tax bills.

"Nobody wants that to happen," he said. "That would be unfortunate."

Rep. Ted Davis, R-New Hanover, insisted that no exception could be made. Former House Finance chair Rep. Julia Howard agreed, explaining that the House rules on occupancy taxes first arose many years ago because dozens of cities had asked for occupancy taxes that would go to their general fund.

"If you pass this, bar the door," said Howard, R-Davie. "Good luck."

"This is going to pass. I’ve done watched. I can count. The boys have gone into the corner office and made a deal. This is going to pass so that can pass," Howard said, adding that committee wouldn’t even be hearing the measure "if this wasn’t the [Senate] Appropriations chair, holding bills because he has the authority to hold bills and intimidating you."

Rep. Harry Warren, R-Rowan, said he was concerned to hear that bills were being vetted not on their own merits but on who had done favors for whom.

"On the retribution piece, I think it happens on both sides, to be perfectly honest," Brown responded.

The bill was amended to add a 10-year time limit on the revenue shift, an amendment Howard requested. Even so, she said, it made a “bad bill” a "hair fraction better," and she announced she was leaving as her vote was called to avoid taking a position on it.

The measure was voted down 9-18, despite the urgings of House Majority Leader Mike Hager, R-Rutherford, and other members of House leadership.

Chairman Rep. Jason Saine, R-Lincoln, compared the meeting to the faux holiday of Festivus from "Seinfeld."

"It’s the airing of grievances," Saine joked.


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