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Senate finance committee delays vote on revised sales tax bill

The N.C. Senate finance committee on Monday discussed but took no action on a bill that would stifle Mecklenburg County’s ability to raise money from sales taxes for teacher raises.

The bill, which could get a vote from the full Senate Tuesday or Wendesday, would cap each county’s sales tax levy at 2.5 cents per dollar – Mecklenburg’s current rate.

In June, a 5-4 vote of Mecklenburg County commissioners placed a referendum on the November ballot to raise that rate another quarter-cent, largely to supplement salaries of Charlotte-Mecklenburg Schools employees. The revenues would also help Central Piedmont Community College, the arts and libraries.

Yet a 2.5-cent cap would effectively nullify a referendum.

During a hearing of the bill’s revisions, Republican Sen. Bob Rucho of Matthews said the cap is an effort to “level the playing field” and bring uniformity to the taxing capabilities of each county.

That legislators are keeping the cap in the bill didn’t surprise county commission Chair Trevor Fuller, who co-sponsored the referendum proposal and has spoken out harshly against the bill.

“I still believe it robs the people of Mecklenburg County of the opportunity to decide for themselves about what to do with their money and not have folks in Raleigh decide for them,” Fuller said. “On basic democratic principles, the bill is just wrong.

“The better approach is to let the people of Mecklenbug have their say.”

The bill started in the House as an economic development bill, creating a new state fund to attract jobs and expand eligibility for grants under an existing program. The sales tax measure was added once it arrived in the Senate.

Initially, the bill set the 2.5-cent cap and said counties could raise the sales tax by a half-cent, but they had to specify whether it was for education or transit. The bill’s authors said they heard concerns about the inflexibility and revised it so counties could divide revenues evenly between education and transit – or either one of those needs and general purposes.

Johanna Reese of the N.C. Association of County Commissions told senators that her group applauds the new flexiblity most counties have, but still had concerns about the cap.

A representative of the N.C. League of Municipalities urged the committee to send the bill to a study committee and take it up during the legislature’s long session next year.

Sen. Jeff Tarte, a Republican from Cornelius, said last week he couldn’t vote for the original version of the bill, but said Monday he would probably push to send the bill to the Senate for a full vote because of the economic development components.

The bill still would need approval from the House and Gov. Pat McCrory.

“The bill still hamstrings us locally,” Tarte said. “It helps 98 percent of the counties, but it’s just not our 98 percent.”

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