Thursday, July 17, 2014

Proposed bill would hobble transit across North Carolina

A bill being considered in the N.C. General Assembly would bar N.C. counties from raising sales taxes to fund both education and public transportation. The taxes could fund one or the other, not both.

The bill - House Bill 1224 - acquired some surprise provisions in the last few days. One provision would kill the plan to ask Mecklenburg County voters in November to OK a quarter-cent sales tax increase to pay for teacher raises and offer a bit of help for arts organizations.

The bill would cap any county's local sales tax at 2.5 cents, and Mecklenburg is already at the cap. See "Senate bill would scuttle November sales tax referendum."

The effect on transit hasn't gotten much publicity in the Charlotte region, although it can't afford to build its long-planned transit system with only the half-cent transit sales tax it's had for 14 years. But in the Triangle, it's a different story. Transit advocates are worried. (Update July 25: The bill was amended to get rid of the either-or provision. It still would cap a county's sales taxes, effectively barring Mecklenburg from its planned sales tax referendum for teacher pay and creating a dilemma for Wake County. Here's a summary of the bill's process. It passed the N.C. Senate on July 24, and now sits in the N.C. House Finance Committee.)
Some background, although be forewarned, it's complicated: In N.C., no city or county can raise sales taxes unless the state legislature gives them permission. But N.C. legislators in 2007 gave all N.C. counties permission to raise sales taxes a quarter-cent, if county voters OK'd. (That's the tax increase Mecklenburg commissioners were hoping to use.) That money could be used for any county use. In addition, in 2009 the legislature gave three Triangle-area counties permission to ask voters for a half-cent sales tax for public transit. The heavily congested Triangle has been planning a rail transit system for years, but had no way to fund it.

Voters in Durham and Orange (Chapel Hill) counties approved the transit tax. In Wake County (Raleigh), a Republican-dominated board of county commissioners has not put the issue to voters. However, Wake commissioners had been expected to decide next month whether to put a quarter-cent sales tax for education to a November referendum.
The Senate bill now would allow sales tax income to be spent on education, or on public transportation, but not both at the same time. Huh? Yes, it's confusing. This article from WRAL-TV is helpful: Senate seeks to curb local tax use. So is this one, from the Raleigh News & Observer: Senate bill would ban N.C. counties from raising sales taxes for both education and transit.

The N.C. Senate was to vote on the bill today; the vote was postponed until Monday.

WRAL's Laura Leslie quotes a Raleigh-area legislator,Sen. Josh Stein, D-Wake, who said he was puzzled by the bill:

"Why wouldn’t we allow it, if they chose to designate a quarter-cent to transportation and a quarter-cent to education? Why must it be one or the other?" Stein asked. "What if they have needs for both?"

Raleigh-area transit advocates worry the bill could devastate plans for multicounty systems. "This is a really bad bill that could kill the transit referendum for Wake County," Karen Rindge with WakeUP Wake County wrote in a message to supporters. Another source, speaking on background, told WRAL: "It pits transit against education, and transit's going to lose every time."

In Charlotte, meanwhile, the 1998 half-cent transit tax doesn't bring in enough money to build anything beyond the Blue Line light rail, now operating, and the Blue Line Extension, under construction. No nearby counties have stepped forward to help make the Charlotte Area Transit System a regional one.

Of course, tax policy experts will tell you sales taxes are harsher on the poor than property taxes, because the poor spend a larger proportion of their income on food, clothing, and other taxed purchases. So why not just raise property taxes to fund both education and public transportation?

In my experience, no matter how practical that idea may sound, the question is about as welcome as an ex-boyfriend at a bridal shower. In other words, you aren't likely to hear any pols -- local or state -- asking it.