A bill that tells local governments how much and how they can tax their residents sends a clear message to cities and counties in North Carolina: The state is running the state – all of it.
The bill, approved by the Senate Finance Committee on Tuesday, would cap local sales taxes at 2.5 cents per dollar, and it would make county governments choose whether future tax increases would go toward transportation or education.
Not coincidentally, Mecklenburg County’s sales taxes are already at 2.5 percent. (The state levies an additional 4.75 cents). That means a November referendum to raise the county’s sales tax by a quarter-penny would be moot because it would put Mecklenburg over its limit.
Was the new state bill specifically targeting Mecklenburg? Probably. State lawmakers are peeved that Democratic commissioners who supported the referendum didn’t bother to have a conversation with their state delegation before approving it last month. Commissioners also had little to no communication with business interests, Charlotte-Mecklenburg Schools and the city of Charlotte. By law, they don’t have to talk to anyone.
But the state is clearly moving in a different direction with taxes. Last year, lawmakers passed a series of tax cuts in a half-baked attempt at tax reform, and discussions are continuing in Raleigh about how to do more. You can bet, given that Republicans are in control, that those discussions don’t include tax hikes.
Of course, it’s equally half-baked to mandate a sales tax cap without developing ways for counties to make up for lost revenue. It would be nice if state lawmakers let everyone in on what they have in mind for reform, so that local governments can know how best to approach urgent budget needs. For now, the only message from Raleigh seems to be this: Ask us first.
That’s the wrong message. By limiting the ability of local governments to raise revenue, the state is nullifying the voices of voters who elected local officials to make decisions about their cities, towns and counties. In this case, the state doesn’t want to give local voters even the chance to say yes to taxing themselves.
But that’s the new reality in Raleigh. Despite claiming to be the party of local control, Republicans in Raleigh have passed laws limiting local control over everything from billboards to business privilege taxes. County commissioners know they are operating in this political environment. They chose to ignore it – and ignore Raleigh – when proposing a new tax to give teachers additional pay and fund arts and libraries. Now they might have to start over.
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