Senate tax bill targets Wake, Mecklenburg

Posted July 22, 2014

The Senate Finance Committee on Tuesday approved a proposal to limit the power of four large North Carolina counties, including Wake County, to raise sales taxes.

— The Senate Finance Committee on Tuesday approved a proposal to limit the power of four large North Carolina counties, including Wake County, to raise sales taxes.

The measure, House Bill 1224, would make it easier for most counties in the state to raise sales taxes. Sponsor Sen. Rick Gunn, R-Alamance, said changes made Tuesday would allow local leaders more flexibility to raise sales taxes for whatever purpose voters approve.  

For four counties, however, the opposite is true.

Under current law, six counties – Wake, Durham, Orange, Mecklenburg, Forsyth and Guilford counties – have the power to ask voters to approve both a half-cent increase for transit and a quarter-cent increase for education, for a maximum of 2.75 percent.   

Durham and Orange counties have already enacted both. Their current local rates are 2.75 percent,  and the bill would allow them to keep those rates.  

But all other counties in the state, including the four other transit-tax counties. would be barred from asking voters to raise the local sales tax above 2.5 percent. 

Mecklenburg County, where the local tax rate is already at 2.5 percent because a transit tax is in effect, would have to scrap a quarter-cent increase for schools set to go before voters in November because it would raise the county's rate above the cap.

In Wake County, commissioners are expected to decide Aug. 4 whether to ask voters for a quarter-cent increase for schools this fall. If that increase passes, however, the county would be barred from asking voters for a half-cent transit tax.

Sen. Dan Blue, D-Wake, said Wake County has already entered into an agreement with Durham and Orange counties to raise its sales tax for the development of regional transit. 

"They have to go in at a half-percent. That's the contract they're into," Blue said. "So, in effect, you’re telling the state’s second-largest school district that, if you comply with the deal you've made with other counties, then you’re precluded from doing anything for public education."

"Is it the intent in this legislation to put the shaft to Wake County and Wake County alone?" Blue asked. 

"It certainly will be their choice if they want to levy the one half-cent for transit," Gunn said. "They’ll have the same options that the other counties have."

"You are targeting four counties in particular on this – four counties that are urban counties that were recognized as having transit needs," protested Sen. Josh Stein, D-Wake. "You’re tying the hands of Wake County." 

"We want to level the playing field," Gunn replied. "This 2.5 percent cap is going to be in place and provide some universal appeal to the whole area."

The bill would offer political cover to Republicans on the Wake County Board of Commissioners, who have resisted mounting public pressure since 2011 to put the transit tax before voters. 

On Monday, with the Senate proposal in circulation, the county's Republican commissioners changed course on that issue, directing county staff to fast-track transit plans.  

The next stop for the legislation is the Senate floor, where it could be debated as soon as Wednesday. The bill would still need the approval of the House. 

House finance leaders said Tuesday they were not informed about the bill by Senate leaders and are trying to learn more about the proposal.


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  • humm51 Jul 23, 2014

    So much for all that "small" government garbage they preach but don't really believe in.

  • Matt Wood Jul 23, 2014
    user avatar

    View quoted thread

    Considering Forbes just announced Raleigh as the No. 1 city to grow business and careers AGAIN, I'd say they must be doing something right! And being 6th in migration, lots of people are moving here, so the current tax rates aren't scaring anyone.

    Besides, this bill is EXACTLY the "more government" you're decrying. Why can't the locals decide for themselves?

  • Anita Woody Jul 23, 2014

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    "higher taxes and more government are so inviting."

    You described this legislature perfectly. More taxes and bigger government, even so much more government as wanting to create a database of NC registered drivers and where they go. If citizens of a city want something and want to pay for it themselves through a temporary tax, they should be allowed to.

  • flanneldaddy Jul 23, 2014

    If you want cities to grow and offer less urban sprawl, thus preserving farm land and other sensitive lands you need to not limit the future progress of transit. Why are they attacking cities? Bad idea.

  • Bill Mooney Jul 23, 2014
    user avatar

    They seem afraid that Mecklenberg and Wake will have higher taxes, more government services and everyone will still want to live there. Citizens are willing to pay for better services and these radical right-wingers dislike that because it disproves their ideology.

  • Dana McCall Jul 23, 2014
    user avatar

    I think we fought a war over states' rights. This argument is no different. If people in one county want to have an outlier tax rate, it is their right to do so.
    The state does, however, need to simplify the ever-complicated E-500 Sales and Use tax deposit system.

  • archmaker Jul 23, 2014

    View quoted thread

    but that's the point isn't it?
    if the people in a community decide they want something AND they are willing to pay for it, should the nanny general assembly (with bills sponsored by legislators who don't live in that community) take away that democratic process?

  • hiko Jul 23, 2014

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    After paying for teachers, books, equipment, bus transportation, curriculum materials, supplies, and more, it is amazing that we're 48th and not 50th in education for the US.

  • archmaker Jul 23, 2014

    more of the war on local governments from the general assembly.

    if these guys want to represent the people of wake county (who want the democratic ability to decide whether they want something and want to be taxed to pay for it), then they should pack their bags and move here.

  • dubious Jul 23, 2014

    Just another example of the "smaller, less intrusive government" brought to you by the tin gods in the NC State Senate.