Spare the cities
Published March 15, 2014
Editorial by Greensboro News-Record, March 14, 2014.
State legislators are at it again. They are considering a plan to restrict local governments’ authority to govern themselves.
In the last few years, the legislature has dictated decisions to cities and counties about airports, a water system, gun regulation, rental unit inspections, billboards, annexations, local elections and environmental rules. Now, its Revenue Laws Study Committee has drafted a proposal to limit how much cities could charge for privilege licenses to a maximum of $100 per business.
The change could cost Greensboro $2 million a year, according to Marlene Druga, the city’s deputy finance director. That represents two-thirds of the $3 million expected this year — a huge hit.
It’s part of the “tax reform” push by Republican legislators. They’ve cut income-tax rates while broadening sales-tax collections. This would impose uniformity across the state, preventing any city from charging more for business licenses than any other. Some have “abused” their authority, state Sen. Bob Rucho, R-Mecklenburg, told a N.C. League of Municipalities committee this week.
Similar rhetoric was heard at a study committee meeting Tuesday. “There’s a limit to what we can condone for behavior, if you will,” Sen. Bill Rabon, R-Brunswick, said.
“Uniformity” makes no sense. Why shouldn’t a business operating in Greensboro pay more for a privilege license than a similar business in a small town? Why shouldn’t a business with higher revenues pay a higher fee?
Privilege licenses have long been a part of municipal tax structures. They’ve been set at the discretion of locally elected city councils — most of which avoid excessive or “abusive” levies. This is not a matter of “behavior” that meddling state senators should condone or not condone. Local governments should determine local taxes.
If Greensboro loses $2 million in revenue, it could cut services. Or it could raise other taxes to cover the shortfall.
Rucho, chairman of the Senate Finance Committee, told the League of Municipalities that cities could be “kept whole” through new sales-tax revenues. League officials viewed that suggestion with skepticism. Well they should until they see something concrete. But few local leaders expect any favors from this legislature.
Cities might hope that Gov. Pat McCrory refuses to support this measure. Charlotte, where he was mayor for 14 years, reportedly would lose $8.5 million a year. As mayor, McCrory pushed for new revenue sources to pay for big-city initiatives like the light-rail system. He should oppose efforts to handcuff Charlotte and other cities. North Carolina Metropolitan Mayors Coalition, an organization he founded, listed as one of its legislative priorities for 2013, “protect existing local revenues.” That goal has not changed.
Unfortunately, the legislature has overrun local prerogatives time after time. That “behavior” should stop. Cities should have more leeway to govern themselves, not less.
