Local sales tax cap comes back

Posted August 1, 2014

House and Senate leaders have agreed on a retooled bid to limit urban counties' ability to raise sales taxes. That could leave Wake County voters with a tough decision this fall.

House Bill 1224 appeared to be dead for the session Thursday morning, but just before midnight Thursday, Senate leaders unveiled a revised version of the plan.

The original bill would have capped the maximum local sales tax in any county at 2.5 percent. While it would have given most counties more flexibility to raise sales taxes with voter approval, it would have restricted taxing power in four counties whose cap had already been set at 2.75 percent.

Wake, Mecklenburg, Guilford and Forsyth counties had already been granted authority to ask voters for a half-cent sales tax increase for transit needs, in addition to a quarter-cent for education or general use. Lowering the cap in those counties to 2.5 percent would limit their ability to raise money for both transit and education.

Under the new version of the bill, those four counties could keep their elevated cap – but only if voters there have agreed to a quarter-cent increase for general use by the end of 2014.

Mecklenburg and Guilford counties already have that quarter-cent sales tax proposal on the ballot this November, so they could qualify to keep their higher cap if voters pass the initiatives. Wake and Forsyth counties, however, do not.

Sen. Bob Rucho, R-Mecklenburg, said the change was made after leaders in the affected counties criticized the earlier plan.

"There were some concerns about some counties feeling they needed to have an opportunity to vote on the quarter-cent," Rucho said. "We thought it was a very fair way to achieve that opportunity if they choose to do that." 

But Sen. Dan Blue, D-Wake, was incredulous. 

"You are giving Wake County 90 days to put a proposition on the ballot as to whether it wants to tax its citizens at a quarter-cent for educational purposes?" Blue asked. 

"We were trying to give them an opportunity, as you were critical," Rucho responded. "You should be thrilled and happy that you achieved your goal."

"Don’t think you’re solving any of the problems you've caused Wake County by throwing this at us," Blue replied.  "I don’t know why you’re singling Wake County out for this kind of treatment."

Sen. Josh Stein, D-Wake, argued that campaigns for tax increases take time, money and planning to be successful.

"It is impossible in 90 days to start a referendum campaign. You are all but killing it for Wake County," Stein said.

Wake County commissioners have never formally considered a quarter-cent tax increase, although they are expected to discuss it at a meeting on Monday.  

Stein noted that Rucho's own county of Mecklenburg "is taken care of" by the change. 

"Once again, you are telling the voters of Wake County, 1 million strong, that you know better than we do what our priorities are," Stein said, "and you're wrong." 

The final version of House Bill 1224 also includes several grant programs for economic development, including the Job Catalyst Fund, a new grant fund sought by Commerce Secretary Sharon Decker, and legislation allowing crowd-funding of start-ups in North Carolina. 

Senate leaders also added several revenue law provisions to the bill from Senate Bill 763, an omnibus measure that failed to pass the House in time to be approved by the end of session.

However, two high-profile items were missing. The House voted Thursday in Senate Bill 763 to extend the state's film tax incentive program and historic preservation tax credit.  Those items were not included in the final version of House Bill 1224. 

The measure passed the Senate 32-11 shortly after midnight Friday. It will receive a final vote in the House Friday or Saturday.


This blog post is closed for comments.

Oldest First
View all
  • miseem Aug 1, 2014

    View quoted thread

    And due to the higher unemployment numbers over the last few years, employers have been holding down salaries and wages. Except for upper management. They get raises and bonuses for cutting jobs, doubling up workloads, and holding down pay for the rank and file. Sort of like reverse price gouging.

  • disgusted2010 Aug 1, 2014

    View quoted thread

    Absolutely Wrong. They don't get checks, its direct deposit now so they don't even have to leave home to get their entitlements. After all, we can't inconvenience those who refuse to work.

  • Come On_Seriously Aug 1, 2014

    View quoted thread

    Yes- Good plan. It should be illegal to vote for anyone who thinks FOR themselves instead of OF themselves.

    I think you may have your parties reversed. No one is being 'bought' by some shadowy 'liberal fringe group' though those conservative fringe groups (say, the T party) are always angry. But, long with Meck and Durham, Wake County does have a higher number and percentage of high school, college, and university degrees than anywhere else in the state and a large portion of the country (most recent US Census). You know, educated people.

    How dare the educated people vote!

  • Brigand Aug 1, 2014

    View quoted thread

    So the right to vote should be taken away and be decided by whom?...People YOU elect or LIKE?....step back from the ledge.

  • Joe Corey Aug 1, 2014
    user avatar

    View quoted thread

    So what do you do when the price of gas to drive to your job triples, the price of a single green pepper is $2 and your health insurance has doubled? And you realize your employer is charging twice as much for the product you make and his take home pay has soared? Do you just take what he gives you and say, "Thank you master?"
    And buildings that are falling apart do affect how students react to an education. This is what happens when you build structures based on lowest bid contracts.

  • Brigand Aug 1, 2014

    View quoted thread

    Wake Count should get to decide via vote (that is democracy by the way) how Wake County taxes. Should not be decided by the State legislature. I am sure if Obama and the Feds wanted to dictate legislation that should be handled by the States, all you supporters of this legislation would be railing about "Big Gov and this is not the Feds right, etc"....same principal here. Exact same.

  • beenc2 Aug 1, 2014

    Regardless of your individual stand on taxation, this bill is still straight-up foolishness.. The GOP ran on less government and not dictating to everyone else. Local sales tax, hence the adjective local, means that the residents of that municipality can choose through referendum how much to be taxed. The GOP ran on that platform and now are just as guilty as the previous democratic legislature. It is impossible to respect NC GOP lawmakers when they show their hypocrisy on a daily basis.

  • Joe Corey Aug 1, 2014
    user avatar

    Enough of the States Rights business. It's time to address municipal rights. Why is some shoeless senator from a distant county whose economy is meth based gets to call the shots on the successful cities? These people come to Raleigh, abuse our hospitality and steal our money.

  • justabumer Aug 1, 2014

    View quoted thread

    Yep. When Person B spends his monthly check on taxable items, he is returning some of the money he was handed by the government. Still a good thing.

  • Danny Cole Aug 1, 2014
    user avatar

    View quoted thread

    Wrong, it puts Wake in the same category as everyone else. The Tax and spend liberals have had the vault door closed on them.