New Utility tax another punch in the nose

| May 30, 2014

tax photoEditorial by Rocky Mount Telegram, May 28, 2014.

Just as we’ve begun warming up to the possibility of a business deal that could lead to a significant reduction in utility bills, news comes this week of a new sales tax to be applied to utility rates, courtesy of the N.C. General Assembly.

Rocky Mount City Manager Charles Penny announced the change during a City Council meeting, as reported by Telegram staff writer Brie Handgraaf.

Tucked inside the tax reforms passed in 2013 by the Republican-led General Assembly was an end to a utility franchise fee paid by power companies to cities and towns in North Carolina. That fee generated about $2.3 million annually for Rocky Mount.

Now, business and residential power bills will be subject to a 7 percent sales tax.

That will sting more than a little, considering the high rates already charged for electricity by the city. Rocky Mount is a member of the N.C. Eastern Muncipal Power Agency, a consortium of 32 towns and cities that incurred a huge debt through the purchase of parts of power plants in the 1970s. Duke Energy has made an offer to buy those assets from the N.C. Eastern Municipal Power Agency. If the terms are deemed satisfactory, the deal could mean a significant reduction in utility bills.

But first, an increase of 7 cents for every dollar spent on electricity and natural gas, beginning July 1.

It’s easy enough to shake our fists at Raleigh over the pending increase, but we would hope members of the Rocky Mount City Council would note the impact and rethink their support for a proposed downtown event center.

The two issues are not related, but the combined potential of increased expenses on Rocky Mount homeowners and businesses is an issue that should concern everyone.

The city hasn’t signed off yet on a plan for financing the center, but many of us worry that the project ultimately will affect property taxes. If that proves to be the case, city residents will be socked twice in the next year or so – every time they open their monthly utility bills and again when it comes time to pay their annual property taxes.

The City Council has the power to do something about one of those expenses. As this newspaper’s editor and publisher and dozens of readers have said on many occasions, now is not the time to build a new event center.



Category: NC SPIN Perspectives - Opinions from NC Leaders & Organizations

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