Nobody likes paying taxes

Published 7:22 pm Friday, June 30, 2017

Three years ago, North Carolina’s General Assembly voted to do away with municipal business-privilege taxes on businesses. The act was seen as business-friendly, but it also left gaping holes in the budgets of cities and towns across the state. For Washington, it was a $125,000 hit; for larger cities, it meant having to make up a shortfall of millions.

At the time, legislators vowed to come up with another way for municipalities to recoup their losses. So far, it has not happened, and city councils are doing more with less.

Now there is legislation floating around the Capitol that would could address filling the gap, rather than cities being forced to raise property taxes. House Bill 900 would allow municipalities to instate a sales and use tax of .25 cents, in a bid to create a new revenue stream. Any funds collected could only be spent on infrastructure, facilities or economic development.

Technically, it’s not a bad idea to help municipalities. However, people don’t like taxes, and considering that a municipal sales tax could only be adopted if voters approve it by referendum, it’s unlikely that residents are going to vote to tax themselves.

In the past decade, 70 North Carolina counties have held 127 tax referendums. Thirty-one passed; 127 have not. Raising one’s own taxes is obviously not a palatable proposition.

So how do cities do more with less? How do counties respond to mandates passed down from the state, with no accompanying funding in site?

They raise property taxes, that’s how.

It happened last year in Beaufort County: a 2-cent increase. It also happened in the City of Washington last year, also a 2-cent increase.

If legislators are serious about wanting to keep property taxes low and giving local governments a chance to replace funds lost by repeal of business-privilege tax, then they need to come up with a bill, and a plan, that doesn’t pass the buck back to municipalities and their residents, who will be paying a sales tax on goods and services. A tax is a tax, whether it’s associated with property or the dinner on the town.

They promised options. Taxing oneself really isn’t an option for most. It’s time for those in Raleigh to come up with a real plan and help their cities, and constituents, out. Business friendly is good; people friendly is better.