Senate strings tie everything in knots
Published July 19, 2014
Editorial by Greensboro News-Record, July 19, 2014.
Republican state senators canceled a floor vote on a confusing sales-tax bill Thursday until they could get their stories straight. Which means it might not return.
Of all the heavy-handed directives the legislature has pushed down on local governments in the past couple of years — airport and water system takeovers, de-annexations, local redistrictings, elimination of privilege licenses — this one might be the most illogical.
The measure, which originated in the Senate Finance Committee without notice Wednesday, was presented as a means of giving counties additional tax flexibility. With voters’ approval, they could add to the local sales tax, designating revenue to schools or transportation projects.
But the strings attached tied everything in knots.
The legislation put restrictions on how new revenue could be spent — for education or for transportation, but not for both. It put a cap on the local sales-tax rate. And, perhaps most baffling, it required that if a county raised the sales-tax rate, it would have to raise it all the way to the cap.
The weird provisions puzzled many local officials and the North Carolina Association of County Commissioners. It provoked an outcry in Mecklenburg County, where it would scrub a planned November referendum on a proposed quarter-cent sales-tax hike meant to raise funds for schools. Mecklenburg already collects 2.5 cents per dollar in local sales taxes — the cap under the Senate bill — and uses some of that revenue for mass transit.
Guilford County commissioners also scheduled a sales-tax vote for November but would have to revise it if the Senate measure were enacted. Commissioners set the amount of the increase at one-quarter cent, with funds going to education. That would raise the local sales-tax rate to 2.25 cents. The legislation says any changes would have to move the local rate to 2.5 cents.
Why on earth would the Senate want to require a half-cent hike instead of a quarter-cent? Finance Chairman Bob Rucho (R-Mecklenburg) said the reason was to create uniformity across the state. That’s a bogus answer because no county would have to raise its sales-tax rate at all. But if a county did raise its tax by a half-cent, with voters’ approval, why couldn’t it use some of the revenue for schools and some for transportation?
This is all mixed up. Does the Senate want to give counties more flexibility or less? It appears to be doing both at once. Does it mean to pressure counties to raise their own funds to provide pay raises for teachers or fund mass transportation so the legislature can continue to cut taxes at the state level? That’s likely, but it came up with a plan with big holes in it.
The half-baked sales-tax bill, which also includes unrelated provisions boosting economic development efforts, was yanked from the calendar before the Senate adjourned for the weekend. Senators will return to Raleigh Monday, but the wacky sales-tax proposals ought to vanish as quickly as they appeared.
