HB 900 was introduced earlier this year and presented a number of options for additional taxes that municipalities would be able to levy on their citizens. I didn’t like it, and I wrote about it here. Fortunately, in the eight weeks since, the bill has been revised. The current version still isn’t great, but it’s significantly less bad.
Rather than allowing cities to impose their choice of prepared food taxes, occupancy taxes, or sales taxes, as the previous version did, this new version only allows a sales tax. It’s limited to ¼%, and it’s subject to a referendum. It’s a much cleaner, simpler bill than the previous version, and that’s a good thing.
I still think the bill is unnecessary. As I wrote in May,
In 2007, the North Carolina General Assembly approved a local option sales tax for counties. Essentially, it allowed counties to impose an additional quarter-cent sales tax if it was approved by voters in a referendum.
In the ten years since the passage of that law, it’s remained quite popular with county commissioners. Since 2007, there have been 127 local option sales tax referenda. It’s been significantly less popular with taxpayers who are obliged to pay those additional taxes. Of those 127 referenda, only 31 have been successful – less than one in four. Not easily deterred, county commissioners have put sales tax questions on ballots multiple times, as allowed by law. That’s why there have been 127 referenda on ballots in 70 counties.
But I can live with this new bill, given two simple additions. First, as written at the moment, the legislation would allow the municipality to hold the referendum at the same time as basically any other election. That should be amended so that the referendum can be held only to coincide with a state, county, or municipal general election. We know that turnout is higher in general elections, and these tax increases are significant. We should make sure that voters are given the best opportunity to weigh in, which means general elections.
Second, municipalities should only be allowed to hold one referendum on the issue every ten years. Several counties have put the same question to voters as many as five times until they get the result they want. That’s forcing a tax down taxpayers’ throats, not listening to the will of the people. This bill should include language to prevent that.
