Revenue needs are a hot issue for mayors
Published 2:57 am Saturday, November 1, 2014
Mayors from across the state will be lobbying the Legislature next year to find ways to make up for lost revenue.
On Oct. 23 and 24, mayors from the state’s cities with populations over 30,000 met in Asheville to discuss their needs and hear from Gov. Pat McCrory about some of his plans. The group is called the North Carolina Metropolitan Mayors Coalition.
Salisbury Mayor Paul Woodson attended the event, and said a big topic was how mayors could lobby the state Legislature to find ways to make up for recent revenue cuts affecting cities.
Woodson said two big holes have opened up in city budgets in the past two years. The first was in 2013 when the Legislature decided to let hold harmless funding expire this year. The funding, an annual payment from the state to about 100 municipalities, brought Salisbury about $700,000 a year in revenue, Woodson said.
In response to the loss of the hold harmless funding, Salisbury City Council raised property taxes and water-sewer rates this summer when the current fiscal year budget was passed. But council did not increase rates by as much as the city’s staff had requested.
The second major blow to revenue is the loss of local business privilege fees. The Legislature voted this summer to abolish the fee. Woodson said the fee raised $350,000 a year for Salisbury, but starting next July, when the new fiscal year begins, it won’t be enforced.
“Three hundred and fifty thousand dollars; that’s almost a penny-and-a-half in (property) taxes,” Woodson said. He said the loss of revenue could be a big problem for cities if no way is found to replace the funds.
Mayors at the meeting discussed what the Legislature in Raleigh can do to replace the lost funds, Woodson said.
Regarding the business privilege fee, Woodson said the mayors talked about urging state lawmakers to implement a fee based on the number of employees a business has. For example, he said, a business would pay $10 per employee and $5 per part-time employee.
Woodson said there would have to be a cap on the fee so large companies wouldn’t be overburdened. “You don’t want to kill one particular industry,” he said about having a cap on the fee.
Another possibility that was discussed is redistributing sales-tax revenue from larger counties to smaller ones. Woodson said people from small, rural counties, go to big ones, like Mecklenburg County, to do their shopping, but Mecklenburg gets all off the sales tax. The idea is to take a portion of the revenue that large, urban counties receive and distribute it to rural counties.
Woodson said the plan could be implemented at the county level too. A town like Woodleaf would get a percentage of sales-tax revenue normally meant for Salisbury since people from Woodleaf come to Salisbury and spend their money.
Woodson said if the state doesn’t do anything to help replenish lost revenues then the only other option is to raise property taxes, and nobody wants that.
McCrory talked about his 25 year strategic transportation plan, Woodson said, and a big part of it is allowing counties and municipalities to have an equal say about how transportation infrastructure should be developed. That’s a change, Woodson said, adding that where roads are built in the state used to be dictated by politics and who was in power in Raleigh. McCrory said a point system and specific criteria will be used to determine where roads and highways are built, Woodson said.
“I think this is one of the fairest things that’s ever been done.” he said.
McCrory also told the mayors he is working to have the state historic preservation tax credits brought back, Woodson said. The tax credits, which expire at the end of the year, offer incentives for developers to renovate historic properties, a big deal for Salisbury.
“We got to lobby the Legislature hard next year to try and get some of that back,” Woodson said.