City to focus on funding issues

Dec. 23, 2012 @ 04:00 AM

High Point will have a battle on its hands to preserve critical revenue streams when state lawmakers convene next month.

That’s the assessment of former City Attorney Fred Baggett, who now works for the city on a contract basis handling issues related to the N.C. General Assembly.
The legislature is expected to take up many matters affecting local governments in general and High Point in particular during its 2013 session. Republicans have complete control of the legislature for the first time in 150 years, and they intend to make major changes in many areas, such as tax reform and transportation funding, Baggett said.
“Instead of gridlock which sometimes results in no major legislation, we have a situation where the leadership can accomplish about what they want to. So we could see some major, major legislation affecting cities,” he said.
One of the city’s top priorities will be trying to secure an extension of state hold harmless funding that is coming to an end for High Point and other local governments this year.
Growth in sales tax revenue over the past decade was supposed to compensate for the end of this funding stream, which has flowed from the state to High Point and other cities in one form or another for the past 20 years. Sales tax growth never materialized as projected and, with the expiration of the payments, High Point stands to lose about $500,000 in its next budget.
“I think it’s an uphill battle because of the budget constraints of the state legislature and also the competing priorities that exist now for all state funding,” Baggett said. “I think the attitude of some state legislators is, the cities and counties that got this transitional funding had 10 years to prepare for its loss, and now we’re at that point.”
A second significant budget hit to the city could come in the form of a new unemployment payroll tax on local governments that the legislature may impose to fund the repayment of the state’s estimated $2.5 billion debt to the federal government for unemployment benefits.
Officials estimated that the cost to High Point could be about $330,000
“The point is that the state is shifting their costs to cities and towns,” said City Manager Strib Boynton.
Baggett said it’s critical for City Council members to be engaged in state legislative issues that affect the city by knowing and communicating regularly with High Point’s legislative delegation.
Lobbying for continued state funding on behalf of the High Point Market, which totalled about $1.65 million this year, also will be critical, he advised.
Baggett said state Rep. John Faircloth, a High Point Republican, was very helpful in securing market funding during the last session, and that he will have more of a leadership role in the legislature in 2013.
pkimbrough@hpe.com | 888-3531