August 21, 2015
House rejects bill with Senate sales tax plan
By SANDY SEMANS
not the ocean breeze you hear. It's the collective tentative sigh of
relief from local governments because the House has refused to accept
the Senate changes made to House Bill 117, N.C. Competes.
While in the Senate, the original bill, an incentives package requested
by Gov. Pat McCrory, was amended twice to add the proposed sales tax
redistribution which would cost the towns and county several million a
year in sales tax revenues.
Originally, the Senate inserted an amendment which would split the
distribution of sales tax based 80 percent on population and 20 percent
on point-of sale. After McCrory and House Speaker Tim Moore announced
that they would not accept the sales tax redistribution, the Senate
again amended the bill, this time based on a 50-50 split.
The new proposal, if made into law, would go into effect in the fiscal
year beginning July 1, 2016 and the full change would occur at that
time instead of being phased in as in the previous plan.
The 50-50 scenario would reduce sales tax coming back to Dare County
and the local municipalities by 24 percent. Under current law, which
dictates that 75 percent of the sales tax sent back to local
governments is based on point-of-sale and 25 percent on population,
Dare County is estimated to receive $19.1 million in the 2016-17 fiscal
year. Under the new plan, the amount would be reduced to $14.6 million,
which is a $4.6 million cut -- unless the proposal to expand the sales
tax base is approved.
An expansion of the sales tax base, adding tax on such things as auto
repairs and veterinarian bills, would return some of the lost revenue
to counties. With that proposed expansion, estimated sales tax revenues
would be $15.1 million which is a $4 million reduction – 21 percent -
from projections for the same time frame under current law.
The municipalities also would feel the same percentage of reductions under both scenarios.
This week, the House voted 111-2 to reject the bill and has sent it to
conference committee to see if the two chambers can reach a consensus.
While the wheels of legislative work have been grinding slowly, it was
another week of excused absences for Sen. Bill Cook, R-Chocowinity. He
has been missing from Raleigh since July 29 when he last voted.
A public records request filed with the Senate's Chief Clerk's office for the
paperwork filed and approved for Cook's extended leave had not yet been
responded to at press time. Raleigh sources say that the senator has
been vacationing overseas.
There is still no budget, but the two chambers have agreed to
compromise on the bottom line of the budget -- $21.74 billion which is
$265 million more than the Senate wanted and $415 million less than
proposed by the House.
Schools around the state are opening for the new school year on Monday
without knowing what revenues they will receive to operate the
educational facilities. This has left school administrators frustrated
because they don't know if they will be funded to have teacher
assistants, if teachers will receive raises, and if programs such as
driving courses will be paid for.
The new deadline for the budget to be finalized is Aug. 31.
Senate Bill 15,
Unemployment Insurance Law Changes, has now passed the House and is
back in the Senate for concurrence. The bill, if enacted into law, will
mandate that those receiving unemployment benefits must show proof of
applying for five positions each week. Attempts to reduce the number of
required applications to three each week failed.
Clarify Reasonable Health Insurance, was signed into law last week. The
bill caps the amount a parent can be forced by the court to pay for
health insurance for a minor child. Previously, the law mandated
“reasonable” cost could be imposed. The law now defines “reasonable”
as: “the coverage for the child is available at a cost to the parent
that does not exceed five percent (5%) of the parent's gross income. In
applying this standard, the cost is the cost of (i) adding the child to
the parent's existing coverage, (ii) child-only coverage, or (iii) if
new coverage must be obtained, the difference between the cost of
self-only and family coverage.”
The law also includes the creation of an ombudsman program for long-term care patients.
Semans is a retired newspaper editor and reporter who now works as a
free-lance writer. She lives in Stumpy Point. Her update on the
goings-on in this session of the General Assembly will appear weekly in
The Island Free Press, usually on Friday.)
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