Mount Olive concerned about loss of privilege tax revenue
By Steve Herring
Published in News on November 9, 2014 1:50 AM
MOUNT OLIVE -- Mount Olive stands to lose $40,000 because of state legislation that will repeal privilege license fees as of July 1, 2015.
This week, the town board adopted a resolution calling on state legislators to live up to their promise to help find ways to offset those lost revenues.
Municipalities across the state, including Mount Olive, are being punished because of abuse by a handful of municipalities whose fees were exorbitant, town commissioners said.
If legislators felt it necessary to intervene, they should have targeted the abusers, they said.
Adding insult to injury are new laws hamstringing a municipality's ability to annex or even to take action within its extraterritorial jurisdiction, they said.
Commissioner Joe Scott asked Town Manager Charles Brown if the state had repealed its privilege license fees.
It did not, Brown said.
Also, Brown said that while the fees will be eliminated, the town will still have to conduct the inspections the fees once paid for.
"(Legislators) promised they would find alternate sources of revenue," Brown said. "Given that they go back into session in January, we felt like this was time to bring this resolution before the board."
Brown said the N.C. League of Municipalities is using the town's resolution as a template and would send copies to all municipalities in the state.
The league has warned 14 municipalities that the loss of revenue may make it necessary for them to raise taxes.
The increases could range between 4.3 cents to 10.3 cents per $100 of property value, Brown said.
"This places a tax burden on people who are already struggling financially," Brown said.
Mount Olive was not one of those warned, he said.
However, Brown reiterated that the board still felt it was time to remind legislators of their promise.
Brown said that people might say the $40,000 is not much.
"When you keep adding those numbers up, and you lose that, and you lose things in the ETJ and after a while it starts to be significant," Brown said.
Should the town's expenses change in 2015, such as in health care, the town could "ill afford" losing the $40,000, he said.
"I think this is a good start to get something," Mayor Ray McDonald Sr. said. "I tell you what I think they (legislators) are going to do -- raise sales taxes one and a half or one percent. That hits the same people. The low man goes and buys groceries, the old man who goes into the drug store, all of that. That is who pays it.
"It is not fair. I don't care what they say."
Commissioner Kenny Talton asked Brown how the law impacted the regulatory process of privilege licenses when someone comes to town.
"That is the downside," Brown said. "You still have to enforce it. You are still required to inspect the businesses and all of the services that we performed that we charged the fee for. You still have to perform all of those services. Now you just can't charge for it."
Brown said the town did not use the fee as a money-maker, but to be able to provide the service.
Scott said he was bothered that there were a "few" municipalities in the state that abused the fee.
"But we are all suffering from it," he said. "We are all penalized because of just a few cities."
McDonald said he had never received any complaints about the fees.
It is the same reason that annexation went away, because of abuse by some municipalities, Brown said.
"But instead of targeting the people who were abusing it, or the guilty party, they targeted everybody," Brown said.