Taxes going up again?
As the weeks pass in the current legislative session, counties and cities alike are concerned that the General Assembly will raise their costs or expand services without providing support.
If the reforms win approval, local officials fear the cost could be tax increases to fill budget holes unless cities and towns get a bigger share of the sales tax.
The Thomasville City Council could join other councils across the state opposing Senate Bill 394, which would eliminate the local distribution from beer and wine excise taxes, as well as reducing the local sales tax on food from 2 percent to 1 percent as part of a restructuring of state taxes.
The utility franchise tax and beer and wine tax contribute about $1.5 million to the city’s general fund. Roughly 300 cities and towns in the state charge some form of franchise tax.
“This would cut our revenues and create a deficit for us,” Thomasville City Manager Kelly Craver said last week.
Davidson County officials, like other county officials across the state, are concerned that the General Assembly will lift an advance fee filing exemption counties had enjoyed on court filings. The exemption expires June 30.
House Bill 343 would hit DSS agencies hard in every county if the departments have to pay fees in advance. Each case filing costs $150, which counties eventually pay. Most counties file hundreds of actions every year. The bill also adds a $20 motion fee counties did not pay before.
The Davidson County Board of Commissioners stopped short last week of approving a resolution against HB 343 and a companion Senate bill. The N.C. Association of County Commissioners is working to modify the bills to reduce the impact to local agencies.
“They are modifying it to be advantageous for us,” Mike Newby, assistant county manager, told commissioners.
The Davidson resolution calls the proposed fees “an unfunded mandate.” The bill also would allow the N.C. Administrative Office of the Courts to withhold distribution of facility fees to cities and counties if counties don’t pay their case filing fees in advance. People who pay court settlements pay the facility fees which are returned to cities and counties for the maintenance of courthouses.
SB-394: Expands the state sales tax to include services, but would eliminate state and local franchise taxes on electricity and natural gas, reduce the local sales tax on food from 2 percent to 1 percent, eliminate all state and local business privilege license taxes and eliminate the local distribution from beer and wine excise taxes.
Cities and towns could lose $320 million a year, according to the N.C. Local Government Budget Association.