As we surmised a couple of weeks ago, House Bill 148 — allowing Triangle counties to levy a 1/2-cent sales tax for transit — isn’t sailing through the Senate quite the way its proponents hoped it would. The bill is in the Senate Finance Committee, which was scheduled to talk about it today. But the bill was dropped from the agenda following the Senate Democrats’ caucus at mid-day. Sen. Josh Stein, D-Wake, said the the party consensus was to finish the state budget first, and see how much of a sales-tax increase that might entail, before taking up the transit-tax issue.
Stein and Rep. Deborah Ross, D-Wake, who shepherded the bill through the House, both expressed confidence that HB 148 will be enacted in this session. “We just need to keep talking about it and building the momentum,” Stein said.
Passage of HB 148 is critical to kick-starting mass transit in the Triangle.
But getting it passed won’t be simple.
Part of the reason the bill is stalled is the inherent tension between the state and the counties when it comes to sales taxes. They’re easy to enact — well, easier than some other, more progressive taxes — which is why the counties grab for them and the state, whenever it’s in a budget hole, slaps their wrists when they do.
Which brings us to HB 148. It would allow Wake, Durham and Orange counties to levy a 1/2-cent sales tax dedicated to transportation improvements if the voters have approved it first in a referendum. Ditto the Triad counties of Guilford and Forsyth. Every other county would be permitted a 1/4-cent sales tax hike for transportation, again following a local referendum. (The only exception: Mecklenberg, which already has a 1/2-cent sales tax for transit — and the first light-rail commuter line in the state, not incidentally.)
The 1/4-cent sales tax option for the “other” 94 counties helped Ross and Rep. Becky Carney, D-Mecklenberg, warm rural House members to a bill that otherwise was of little concern to them one way or the other.
Enter Sen. Daniel Clodfelter, D-Mecklenburg, who wonders why the other 94 need a sales-tax option when most of them already have one that they’ve never exercised. And he’s right. Two years ago, the General Assembly gave every county the option of levying (with voter approval) a 0.4 percent real estate transfer tax or a 1/4-cent sales tax. Every county that’s attempted the transfer-tax hike has run into heavy ack-ack from the Realtors and either backed off or watched its referendum fail. On the other hand, the sales-tax hike has succeeded in about seven counties, including Pitt and Cumberland. (Seven is the number on the Association of County Commissioners website. At the General Assembly, various well-informed people said the number was six, eight, 12, or “between 6 and 12.”)
By Clodfelter’s count, that leaves some 90 counties that have neither enacted the transfer-tax increase nor the sales-tax increase, so why do they need yet another sales-tax option that cuts into the state’s ability to jack up its own sales tax rate?
Carney, talking to reporters in the hallway after the Senate Finance Committee announced it was putting off HB 148, wondered aloud if the bill would pass the House again shoulld the Senate strip out the 1/4-cent sales tax option for 90-some counties. And Ross, noting that most of those counties retain the option of either a transfer-tax hike or a sales-tax hike, said Clodfelter — a progressive Dem — should allow the counties to choose the former, more progressive tax and not force them “to raise their sales tax in order to raise their sales tax again.” Got that? She’s right too.
The two House Dems argued that all of the counties bordering the Triangle and Triad will need some funding for transportation (buses, presumably) so they can tie into the transit systems offered by the two metros. Wilmington/New Hanover would also be left out if the “other” counties are dropped from the bill. And what of the 6-12 counties that increased their sales tax already? Should they be “in” the bill? Or “out” of it?
Things to talk about while the state budget negotiations drag on.