McCrory removes a tax that helps towns and cities

June 10, 2014 

Don’t worry, be happy. That’s the message Gov. Pat McCrory delivered last week when he met with officials of cities and towns in North Carolina through the N.C. League of Municipalities.

The governor just a few days before had signed legislation enacted by the GOP majority that repealed local business taxes, a move that could cost cities and towns a total of $62 million. The money has come from businesses that pay various amounts related to how big they are. An ice cream stand might pay $2.50 a year; Walmart might pay $20,000. The communities use the money in part to support infrastructure improvements that, by the way, help businesses.

But GOP lawmakers, caught up in anti-tax zeal, ignored the effect on municipalities. They passed the repeal quickly.

McCrory, who relied on the taxes when he was mayor of Charlotte for 14 years, now says the so-called “privilege license taxes” were wrong and there was “inconsistency.” Unfortunately, as is often the case, the governor didn’t back up his broad statements with anything concrete.

That’s not a confidence builder for mayors of cities and towns who made common-sense arguments against repealing the tax. McCrory could have at least made a show of standing up for those he once stood with.

The governor told municipal leaders that he would find a way to make up the lost funds, but it was a “trust me” statement from a governor who so far hasn’t shown any ability to push bills through the General Assembly.

This ill-considered tax repeal isn’t going to save businesses much, and it will cost towns and cities plenty. Its effect will be reduced local services or higher property taxes across the state and in Charlotte, where a longtime mayor once welcomed privilege tax revenue.

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