NC tax legislation expands options for counties, could help light rail efforts
Posted September 23, 2015
Raleigh, N.C. — Counties would have more options to raise money for public schools and community colleges under a bill that cleared the House Finance Committee on Wednesday.
Senate Bill 605 is a sprawling measure spanning technical corrections and minor clarifications to substantial policy proposals that stalled earlier in the session.
In one key provision, the bill would allow counties to raise their sales taxes up to their current statutory limits to pay for education-related expenses in both K-12 classrooms as well as at community colleges. The measure is a simplified form of a bill from last session that pitted education and transportation needs against one another.
During their work on the bill Wednesday morning, committee members killed a provision that would have allowed cities to raise a quarter-cent sales tax. Currently, cities do not have the ability to levy sales taxes, and tax writers did not mince words about the provision. Finance Chairman Rep. Bill Brawley, R-Mecklenburg, called it "an incredibly stupid idea," and Rep. Paul "Skip" Stam, R-Wake, said just keeping track of the new tax would be problematic.
"Administratively, it will be horrendous," Stam said. "Every time a city annexes some property, who is taxed under this will change."
Light rail backers scored one victory on Wednesday and could notch a second win when the measure is heard on the floor.
As originally drafted, the bill would have prohibited any state funds from being spent on light rail projects if Wake County raises a sales tax for transportation. This would have been a unique restriction that would have singled Wake County out among the state's 100 counties.
"I don't think the General Assembly should micromanage that," Stam argued, adding that he opposes light rail and would battle against it should it ever go to referendum.
An amendment to remove that provision easily cleared the committee.
Lawmakers discussing the bill Wednesday said there could be an even bigger light rail boon in the works. An amendment that would end a limitation on state light rail spending that was part of the budget has been discussed and could be brought up on the floor. That would revive hopes for a Durham-Orange light rail line that would be prohibitively expensive without state support.
The measure next goes to the House floor and also would need Senate approval before heading to the governor.