NC Senate sends sales-tax cap to House

The N.C. Senate gave final approval Thursday to a statewide limit on local sales taxes, sending a measure that divided urban from rural counties to the House.

The 31-17 vote came after a failed attempt by Concord Republican Fletcher Hartsell to split the tax provision from the broader economic-development bill it is attached to.

Mecklenburg and other urban counties say the 2.5 percent tax cap would limit the ability of large counties to boost teacher pay and public transit systems.

Hartsell first tried to change the cap to 2.75 percent, a move that would allow Mecklenburg County to hold a November referendum on a quarter-cent increase to boost teacher pay and other educational priorities.

Sen. Bob Rucho, the Mecklenburg Republican who has championed the bill, argued that the tax limit was “carefully crafted so there was no hint of a tax increase,” a plan Hartsell’s amendment would upset.

That amendment failed.

Hartsell next invoked Senate rules to propose separate votes on the controversial tax provision and on the rest of the bill. The bulk of the bill, which has broad support, creates a new state fund to attract jobs and expand eligibility for grants under an existing program.

Hartsell found an ally in Sen. Jerry Tillman, R-Randolph, who said he sees no “need for these two to be joined at the hip.”

Other Republicans lined up to argue against splitting the bill. Rucho said the bill was crafted “so all parts work together” to boost economic growth.

“If we divide this question, if you divide it on any part, you destroy the whole bill,” added Sen. Ralph Hise, a Republican from Spruce Pine.

The amendment failed on a 24-24 vote.

The measure now goes back to the House, whose version of the bill did not include the sales tax cap that the Senate added.

Staff Writer David Perlmutt contributed.

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