06/03/14 — Mount Olive officials concerned about privilege tax cut

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Mount Olive officials concerned about privilege tax cut

By Steve Herring
Published in News on June 3, 2014 1:46 PM

MOUNT OLIVE -- Town officials Monday night warned that a tax increase, or a cut in town services, could be facing Mount Olive residents next year if state lawmakers approve a pending bill eliminating certain fees a town can charge -- an action that could take $40,000 out of next year's budget.

That concern Monday night dominated the town board's discussion of its $3 million budget for fiscal year 2014-15, even though the effect of the bill would not be felt until 2015-16.

No one commented during the budget public hearing, but Mayor Ray McDonald Sr. and commissioners encouraged the handful of people at the meeting to ask local legislators to oppose the bill.

Commissioners approved the 2014-15 budget following the 15-minute discussion.

The budget maintains the property tax rate of 59 cents per $100 valuation while providing a 2.5 percent cost of living salary increase for town employees.

Town Manager Charles Brown said the budget returns the town's contribution to employees' 401(k) to 4 percent -- the amount the town had been giving prior to the recession.

The budget also sets aside $44,496 for the fund balance in the general fund and $63,643 for the water/sewer fund capital reserve.

With a tax base of $218,840,045, each penny on the tax rate generates $21,481 in revenues.

There is no increase in the solid waste fees.

But while the current budget failed to generate any excitement, the legislative bill did.

McDonald said he and other board members had met on two occasions with Rep. Jimmy Dixon of Calypso and Sen. Louis Pate of Mount Olive to lobby against the bill. Both seemed "receptive," McDonald said.

He said he would be surprised if they voted for the bill.

McDonald said the town had not been made aware of the bill, but learned about it after Brown read a newspaper article.

Legislators were trying to pull off a "last-minute thing," McDonald said.

"These are the kind of things they try to pull on you," he said.

McDonald's cell phone rang during the meeting and he said the caller was an official with another local town that did not know about the bill until Monday when he had told him.

"We are lobbying really, really hard to try to prevent that from happening," Brown said. "Our position on that is if the legislature in Raleigh takes a revenue source away from the town of Mount Olive, from a source that we can think can well afford it, unfortunately it raises the possibility of having to place that burden on citizens who can ill afford to pay it.

"We will fight that to the bitter end. We stressed that (burden) to our local elected officials, but it will not affect us until our 2015-16 budget."

Commissioner Joe Scott said commissioners are very concerned with the prospect of privilege license fees being taken away from towns.

"One thing that I think people don't understand is, you can't keep putting it on the people," McDonald said. "You just can't keep doing that. This money comes from the business community and they can afford it a lot better than the individual."

While incomes might be somewhat above average in town, there are still people who are suffering, he said, adding that some have no income at all.

"Then you turn around and take something away from us that is helping us to keep our staff and our people paid at least a decent wage, which I still think is not enough," McDonald said.

McDonald said he and Brown had told the local legislators that if they pass the bill, the town would be forced to do something that is going to hurt the average citizen.

"I believe they understood that," he said. "I really don't believe they will vote for it. But they get up in Raleigh and Washington, things happen, I don't what, but things change. They need to be down here with us, with you all. It would make a big difference in what they are thinking."

What has happened is that large cities, instead of charging a minimum fee for a building permit, are instead charging "outrageously high," McDonald said.

Charlotte brings in $18 million on the fees, he said.

"Well, the legislators are getting a lot of complaints from those big businesses there having to pay so much," McDonald said. "So now, they are looking at that, but they (legislators) don't realize that affects us, too."

Mount Olive charges $25, he said. The town's interest is to tell legislators to cap the fees to make the fees uniform statewide, McDonald said.