NC Tax Increase Sidesteps Legislative Process

Capital Conservative**********************************

- NC 100 -

Talking Points

Tax Increase Sidesteps Legislative Process

Two bills that impose a tax increase are making their way through the legislature without proper sunshine.

No Public Notice – The first bill began life as SB 1458, an unrelated royalties reporting bill. The original language was replaced with language allowing for a five-cent increase on rental car taxes in Mecklenburg County, and was brought before the Senate Finance Committee for a vote without public notice. The House leadership has promised sunshine this year, but supporters of the bill don’t seem to care.

Avoiding House Scrutiny – A back-up vehicle was employed when the language from SB 1458 was rolled into HB 1963 (Revenue Laws Technical & Motor Fuel Tax Changes) in the Senate. Why? Because HB 1963, having already passed the House, will simply be returned to the House for a concurrence vote after leaving the Senate, thereby expediting its approval and avoiding scrutiny in a House committee.

Making Deceitful Promises of Revenues – Senators were persuaded with promises of $43 million in direct revenues that the state would reap from the Wachovia Cultural Arts Center in Charlotte, if only they would pass the bill. Never mind that the project has been under construction for some time, so the $43 million is coming whether taxpayers foot the bill or not.

Supplanting of Funds – Much like the diversion of funds from the Highway Trust Fund, these bills allow the funds from the car rental tax increase, which under current law are dedicated to Mecklenburg’s transit needs, to go into the county General Fund, where bill language allows for supplanting of other funds which will be diverted to Wachovia. Supporters say that a 1997 law already allows for higher rental car taxes in the Triangle and the Triad, but those counties do not have the authority to supplant funds, a distinction that is not being disclosed by supporters.

The independent business owners of NC100 OPPOSE SB 1458 and HB 1963 because:

1 - More than 50-percent of car rentals are local – from people who are getting car repairs to businesses who have people coming in from out of town – so local residents and businesses will pay this tax increase.

2 - The bills set a precedent of taxing one industry for the benefit of another – creating a blueprint for all counties to target any industry for taxation for any purpose the county chooses.

3 – Taxpayers become angry when they are misled. When they pay rental car taxes, they think that the money goes to maintain Mecklenburg’s transit systems. With the supplanting language in the bills under debate, that will no longer be true – and taxpayers won’t like it.

4 – There are clear "transparency" questions. Since the complex has long been under construction, why wasn't the bill introduced in a timely manner, by the bill deadline set forth in the rules, so that all interested parties could contribute to the debate? If this is such good public policy, why all the secrecy?

5 – The Wachovia Cultural Arts Center has been in the works for several years, according to the Charlotte media. In addition to the tower that will house the bank’s headquarters and the cultural arts center, the project will include residential condos and office space for sale and lease, with the proceeds going to Wachovia. Since construction of this magnitude is never undertaken without the financing in place, you are clearly being asked to “rubber stamp” a promise that has already been made – without ever hearing debate.

Please Vote NO to a Targeted Tax Increase on Rental Cars Via SB 1458 OR HB 1963!

Perri Morgan
Director, NC 100
9650 Strickland Rd.
Ste. 103-137
Raleigh, NC 27615
919-601-3100