A Mecklenburg County sales tax referendum still could be on the ballot this fall, two lawmakers said Wednesday.
The state House was expected to reject Senate revisions of a bill that would, among other things, scuttle the county’s planned referendum on a quarter-cent tax hike for teacher pay. That would mean House and Senate negotiators would try to reach a compromise.
As passed by the Senate, the bill would cap county sales tax rates at 2.5 cents. Mecklenburg’s referendum, if approved by voters, would bring the county’s rate to 2.75 cents.
“That is dead,” Rep. Charles Jeter, a Huntersville Republican, said of the Senate version that would stop the Mecklenburg vote. “It will not survive in the House.”
A spokeswoman for House Speaker Thom Tillis said he doesn’t support the Senate version of the bill. The House took no action on the bill Wednesday.
The bill would grandfather in the two counties that already have the higher rates, Durham and Orange, which already levy 2.75 cents in local sales taxes. One lawmaker said negotiators could add Mecklenburg to that list.
“I think there’s support for protecting Mecklenburg County on this issue,” said Rep. Bill Brawley, a Matthews Republican.
One senator who could be part of a negotiating panel was more cautious.
“I’m going to have to look and see if that’s indeed necessary,” said Republican Sen. Bob Rucho of Matthews.
The sales tax referendum could survive in either of two ways: if legislative negotiators meet and agree, or if the session adjourns before any action is taken. Adjournment could happen within days.
Brawley said he reached out to Mecklenburg County commissioners’ Chairman Trevor Fuller last week seeking support for a compromise but hadn’t heard back.
Fuller said he told Brawley that he was “favorably disposed” to the compromise. “But I didn’t want to speak on behalf of the board until I got a chance to get the flavor of where people were,” Fuller said.
He said the bill passed the Senate before he could poll the five commissioners, all Democrats, who voted to put the tax referendum on the November ballot. He said he sent a text to Brawley saying he was unable to reach all commissioners before the Senate vote.
Since then, he’s found those commissioners “accept the compromise.”
Fuller said the compromise is reasonable since state law already limits opportunities to raise local sales tax rates – effectively capping rates – and since Durham and Orange counties levy the higher rates.
“I am glad to hear that reasonable heads may be beginning to prevail on the idea that the people of Mecklenburg County ought to be able to decide for themselves whether this quarter-cent sales tax is right for us,” Fuller said.
The cap also could affect Wake County.
Wake also has discussed raising its sales tax to 2.75 cents, which would be above the cap. Raleigh Mayor Nancy McFarlane said Wake would have a harder time handling growth and transportation pressures under a cap.
The sales tax cap is part of a broader bill that creates a new fund for the Commerce Department to use to attract companies to the state.
The House Finance Committee voted Wednesday to recommend that the full House not agree with Senate revisions to the bill. During the debate, one lawmaker questioned the need for referendums like that proposed in Mecklenburg to help pay teachers.
“I think we need to recognize that public education is a state function,” said Rep. Paul Luebke, a Durham Democrat.