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Gov. Easley’s budget calls for a repeal of the hold harmless payment to local governments for revenues that were lost last fall when the state eliminated the reimbursements for repealed local taxes and allowed counties to replace that revenue with a half-cent sales tax. If a county or city did not generate enough sales tax revenues to make up for the lost reimbursements, the hold harmless would provide them the difference. The mayors in the Metropolitan Coalition held an emergency conference call today to discuss the Governor’s proposal. Coalition Chairman, Mayor Keith Holliday of Greensboro, called the Governor’s action “extremely disappointing.” “We took a hit last year when the Governor withheld over $200 million. So we worked hard to help our state legislators and county commissioners to create a reliable revenue source to make up for the loss of over $330 million this year, Holliday said, “We counted on the provision in the law that, for cities and counties like Greensboro and Guilford, they would not lose money again. It hasn’t been six months since we all stood in the General Assembly to fight for this agreement and the Governor has already proposed breaking that promise.” While this loss of revenue would not impact all cities and counties, for some it would pose a great deal of difficulty. Mayor Susan Kluttz of Salisbury is particularly concerned about her city, “If this goes through we lose the equivalent of 4 ½ cents on our tax rate, this means we will once again have to look at cutting services in our city because of an action by the state.” Kluttz added, “ I am hopeful our state legislators will reject this and honor the agreement we had so we don’t have to go back to our citizens once again to find ways to make up the loss of funds.” Mayor Glen Lang of Cary, the Coalition’s Vice Chair, said, “My city is not impacted by this action, but we can’t allow other cities and counties to lose funds they counted on, funds we all thought were part of an agreement last year.” Many of the mayors believe that the state legislature will reject this part of the Governor’s budget. Holliday told the other mayors “I am confident that state legislators will uphold the agreement we had, but we will be vigilant as this budget goes forward.” Established in
2000 and comprised of 21 of the largest cities in North Carolina, the
North Carolina Metropolitan Coalition was formed by the mayors to encourage
the continued development of the urban areas in North Carolina as livable,
environmentally sound, and economically viable centers. More details
on the Coalition, including its priorities for 2003 can be found at
www.ncmetros.org |