Local Politics

Lawmakers want to repeal transfer tax

Posted May 15, 2008 5:37 p.m. EDT
Updated May 16, 2008 10:31 a.m. EDT

— A year after state lawmakers told counties they could ask voters to approve a land-transfer tax to help pay the costs of growth, some of the idea's former supporters want to kill it.

The option would create a 0.4 percent tax on the sales price of real estate in any county where commissioners put it on the ballot and voters approved it.

However, it's been tried 20 times so far and has lost every time, overwhelmingly in most cases.

Lawmakers last year approved the transfer tax and a quarter-cent local sales tax as two options that cash-strapped counties could explore. The idea was to raise money for growth-related needs like schools and roads without raising property taxes.

The 0-for-20 streak has apparently made an impression on lawmakers, and some have introduced House Bill 2097 to repeal the transfer-tax option.

"It tells you that's not the sort of tax that we ought to be putting on people," Senate Minority Leader Phil Berger said of the way the transfer tax has been crushed at the polls.

The Rockingham County Republican opposed the tax option last year, and he said he would support a repeal.

Some of the sponsors of this year's bill voted for the tax option last year, and Berger and others charged that their change of heart is politically motivated, since they all face re-election in six months.

"Some people could say that folks are just trying to cover themselves in an election year," Berger said.

Sponsors said the repeal bill isn't pandering to voters and represents a legitimate concern about the potential impact of the tax if it were ever approved.

Rep. Pryor Gibson, D-Anson, said North Carolina's housing market is weaker now than a year ago, and he said lawmakers should debate the merit of the tax in the current environment.

The repeal faces a slim chance of passage because House leaders who approved the tax last year don't want to take the option away from counties so soon.

Rebecca Troutman, a lobbyist for the North Carolina Association of County Commissioners, said she thinks voters deserve a choice on whether to impose the tax.

"It takes a while to educate the citizens to let them understand what the money will be used for," Troutman said.

Without more revenue options, she said, counties will be forced to turn to property taxes to meet local funding needs.

"We think (the repeal effort is) unfortunate because the demands for our infrastructure are not going away," she said.