Local Politics

State decision could cost Raleigh $7 million

Posted June 5, 2014

— A state decision to cut privilege license taxes next year is already generating budget questions for Raleigh City Councilors.

Last week Gov. Pat McCrory signed a tax reform bill that does away with the tax, which businesses pay to operate in cities and towns. Raleigh officials predict that this will hit the city budget with $7 million in lost revenue.

The House version of the bill would have capped the tax at $100, but without consensus between the House and the Senate, no replacement was included. The law will take effect July 1, 2015.

During Monday’s budget work session, Mayor Nancy McFarlane reminded Councilors to keep the lost revenue in mind as they work on next year’s budget.

“We need to plan assuming that we won’t have that $7 million,” she said.

The lack of revenue could pose challenges in following budget years.

WRAL.com has a content sharing partnership with Raleigh Public Record, a non-profit online news organization focused on coverage of Raleigh and local government.


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  • PJM Jun 11, 2014

    What a man what a man what a man ....what a mighty good man!!!!!!!!

  • Jump1 Jun 10, 2014

    All cities will have to double all taxes to make up any loss. And the citizens will have no say so in this.

  • Jack Jones Jun 9, 2014
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    Perhaps Tillis and McCrory think the $7M should come out of our children's education funding as well?

  • Terry Watts Jun 6, 2014
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    GOP can pat themselves on the back for lowering taxes, while forcing the left-leaning cities to raise taxes. Just a little revenge by the GOP GA...

  • RDcallsit Jun 6, 2014

    we pay taxes these days to breathe. we have no protection or guarantee either way.

  • John McCray Jun 6, 2014
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    If you read the law and consider the new sales taxes enacted last year, it appears, at least superficially, as a way to take the taxes municipalities were making on certain things, and give them to the state via the new sales taxes. There are some other interesting clauses within this General Statute.

  • John McCray Jun 6, 2014
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    View quoted thread

    Why would it be expanded to individual home owners? It's a tax on someone or something to do business. Individuals pay property taxes.

    If you are interested, here is a link to the Overview of these taxes in NC. http://www.ncleg.net/DocumentSites/committees/revenuelaws/Meeting%20Documents/2013-2014%20Meeting%20Documents/01-14-2014/Franchise%20and%20Privilege%20Tax%20Overview.pdf
    Seems a large part of these taxes are paid by companies that have franchise taxable values of over $20M.

  • Danny Cole Jun 6, 2014
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    View quoted thread

    And every day we see business leaving RTP or laying off, i.e. IBM. When taxes make profits impossible, they move. And having a "Strong Arm" tax to keep a business open is unthinkable to most rational thinking people.

  • Danny Cole Jun 6, 2014
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    Glad the Libs think it's ok to pay "Protection" money. That is what this tax amounts too. If you owned a business and was having to pay strong arm money to keep someone from closing you out you'd scream and hollar, But you think it's ok for the Cities and towns in this state to "Strong Arm" businesses into paying a tax just to keep open.

  • Danny Cole Jun 6, 2014
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    I love how all the Libs thinks a Business should have to pay a fee for the Privilege of opening in town in NC. This is a tax that never should have been. And all the Libs saying it will cause a property tax increase, maybe they should be telling the Mayor and the City Council, to live within the budget they now have. Surely there is 7Million dollars worth of fat that can be cut out of the budget.