Let’s get the good news out of the way first: Charlotte leaders on Friday said the city’s 2016 budget won’t include a tax increase.
That puts the city in step with Mecklenburg County, which isn’t hiking taxes, either.
Let’s celebrate, some would say.
Perhaps. But let’s put an asterisk at the end of that thought. An $18.1 million asterisk.
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That’s the amount of money that vanishes from the city’s revenue stream July 1, when a state law eliminating a tax on businesses kicks in.
To be sure, the business privilege license tax wasn’t perfect. Levied on companies for the “privilege” of operating in a city, the tax was interpreted and applied inconsistently from city to city. It arbitrarily exempted some businesses.
Still, it supplied a valuable stream of income for more than 300 cities, with Charlotte foremost among them.
Top legislators and Gov. Pat McCrory pledged to help cities replace the lost income.
They didn’t say how. But they said they would.
“I look forward to working with municipalities and the General Assembly to seek a long-term resolution,” McCrory said in May as he signed the law that killed the business privilege tax.
Republican legislative leaders said they’d keep working with municipal officials to craft a solution, with an eye on bringing a plan forward this session.
But Mayor Dan Clodfelter, who opposed the tax during his time in the N.C. Senate, told the editorial board Friday that he hasn’t heard a specific replacement plan from lawmakers.
They promised, he said. “I can only assume they’re working on it.”
Meanwhile, the city’s preliminary 2016 budget assumes no replacement for the business tax income. As it stands, the budget comes up short by nearly $16 million. Employee pay raises figured into it could fall out if the city can’t otherwise close the gap.
The long-term prospects aren’t encouraging. Charlotte, despite its strong economic rebound, is dealing with explosive population growth – the second highest rate among U.S. cities of more than 500,000 people.
The city says it is serving more people with less money per capita than it did four years ago. It expects budget shortfalls each of the next four years.
Sen. Bob Rucho of Matthews and other Republican leaders in Raleigh have shown a far stronger interest in taking money from Charlotte than in giving it more. This despite the fact that Charlotte, Raleigh and the Triad power this state’s economy.
Common sense tells us the big-city-hating needs to stop. And replacing the lost business privilege income is a good place to start.
Some lawmakers have said applying sales taxes to more services might do the trick. Or plugging tax collection loopholes in online travel site bookings.
Unlike the messy fight over control of Charlotte Douglas International Airport, the Republicans in Raleigh hold all the cards here.
They promised. It’s time to deliver.