Politics & Government

NC House kills sales tax cap idea

North Carolina lawmakers Friday effectively killed a measure that would cap county sales taxes, a move that will allow Mecklenburg County to go ahead with a planned November referendum.

House members voted overwhelmingly not to consider the measure that would have capped local sales taxes across the state.

The House move came after the Senate approved the measure before adjourning in the wee hours of Friday morning. The House parked the bill in the Rules Committee, where bills often go to die.

The bill originally threatened to scuttle Mecklenburg’s referendum, which will ask voters to approve a quarter-cent increase largely to augment teacher pay.

As drafted, the bill would have capped local sales taxes at 2.5 cents, the level Mecklenburg already is at. A successful referendum would bring the sales tax to 2.75 cents.

Hours earlier, the Senate carved out an exemption for Mecklenburg, Wake and two other large counties to allow taxes totaling 2.75 cents.

But the Senate added a use-it-or-lose-it provision. The urban counties would keep their authority to raise local sales tax rates to 2.75 cents – but only if they exercise part of that power quickly, acting before the last day of 2014 to levy a quarter-cent tax.

That would work for Mecklenburg but not for Wake and other counties which have not planned any fall referendums.

“It’s too fast in regards to what it wanted to do in Wake County,” said Rep. Marilyn Avila, a Raleigh Republican. “We don’t have enough time to explain to people what it is. But secondly, they didn’t have enough time to explain it to us.”

Rep. Charles Jeter, a Huntersville Republican, said GOP lawmakers had a lot of reservations about the bill. The measure also spelled out how much of the tax local authorities could use for education or other purposes.

“We go around the state and tell people we are now third in education funding from the state nationwide, and we think counties and locals should do more,” Jeter said. “If you believe that, I do not think we should take arrows out of the counties’ and cities’ quiver that allow them to do more.”

Commissioners Chair Trevor Fuller called the House action “the right thing.”

“It’s good that the people of Mecklenburg County retain the ability to decide for themselves how to spend their own money,” Fuller said. “We’ll have an opportunity in November – as a community – to speak about whether we support increased funding for teacher compensation.”

Fuller said he’d heard from several groups and individuals who support raising the sales tax. He declined to name any, except for the public library system – which stands to receive 3.5 percent of revenues from the increased tax.

Teachers will likely support the November referendum. Mecklenburg’s two largest teacher groups – Charlotte-Mecklenburg Association of Educators and the Classroom Teachers Association – will support it, their leaders have said.

Central Piedmont Community College President Tony Zeiss has called the measure “reasonable.” Teacher salaries at state community colleges rank 42nd in the country, he said. CPCC is slated to get 7.5 percent of the revenues from the tax.

Fuller calls the sales tax increase a “sustainable” way to supplement teacher pay and keep their salaries competitive.

“We’ve got one shot at this – that’s it,” he said. “If we don’t take it, shame on us.”

Staff writers John Frank and Bruce Siceloff of the (Raleigh) News & Observer contributed.