N.C. Senate committee endorses sales tax limit
07/22/2014 6:25 PM
07/22/2014 7:25 PM
A North Carolina Senate committee Tuesday endorsed a measure that could prevent Mecklenburg County voters from approving a quarter-cent sales tax increase to supplement the pay of local teachers.
The measure caps local sales taxes at 2.5 percent – Mecklenburg’s current rate. County commissioners last month had scheduled a November referendum on additional money to help teachers, Central Piedmont Community College, the arts and libraries.
The Senate finance committee endorsed the bill on a voice vote after brief debate on its impacts on large, urban counties such as Mecklenburg and Wake. It’s expected to go to the full Senate on Wednesday.
Republican Sen. Bob Rucho of Matthews, the committee’s co-chairman, has said the cap is an effort to “level the playing field” and bring uniformity to the taxing capabilities of each county.
The Senate added the sales tax provision to a House economic development bill creates a new state fund to help attract jobs and expands grants under an existing program.
Changes added Monday don’t force counties to choose between spending the extra revenue on education or public transit, adding a “general purposes” option.
While the measure is considered a boon to most of North Carolina’s 100 counties, larger counties that already have higher sales tax rates say they would be unfairly limited by the measure.
Sen. Josh Stein, a Raleigh Democrat, said the measure targets four urban counties – Mecklenburg, Wake, Guilford and Forsyth – that could exceed the 2.5 percent cap if they enact transit taxes.
The bill allows Orange and Durham counties to continue levying the 2.75 percent sales taxes they already have in place.
“A ‘level playing field’ doesn’t exist because Orange and Durham counties already have a 2.75 percent tax,” Stein said.
N.C. Metropolitan Mayors Coalition Executive Director Julie White said the state’s urban and rural regions have different challenges and that the legislation restricts voters from determining their county’s appropriate level of investment in education, transportation and other economic development strategies.
“We need different solutions for these two distinct set of challenges,” said White, whose group consists of 27 mayors from the state’s larger cities, including Huntersville Mayor Jill Swain, the coalition’s vice chair, and Charlotte Mayor Dan Clodfelter.
“A one-size-fits-all approach in North Carolina does not work.” David Perlmutt contributed.
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