A Senate Republican plan to change how sales taxes are collected and distributed across the state would prevent Wake County from levying a proposed half-cent sales tax for investments in bus and rail transit improvements.
The sales tax overhaul added by Senate leaders to a House bill last week also was incorporated into the proposed Senate budget released Monday.
Wake commissioners are hoping to put a half-cent transit sales tax on the referendum ballot in 2016. But the Senate legislation would allow counties to increase the tax rate by only one-quarter cent at a time.
“It would certainly complicate what we’re seeking to do,” Wake commissioner John Burns said. “This will be interference from the legislature.”
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Last summer, Senate leaders sought to eliminate Wake’s transit tax option altogether. The legislature ended up in a compromise that precluded a referendum in 2015 but left Wake with the ability to schedule the vote next year.
Sen. Dan Blue, a Raleigh Democrat, said he and other legislators will oppose the effort to cancel Wake’s option for a half-cent transit sales tax.
“I don’t know why this would be aimed at Wake County specifically, unless it’s a continuation of the fight we thought we had won last year, when they tried to eliminate the use of those funds totally,” Blue said. “They’ve got a burr under their saddle for public transportation and for Wake County.”
Orange and Durham counties are collecting a half-cent sales tax for expanded bus service and to help pay for a planned light rail line from Chapel Hill to Durham. Wake leaders are developing plans for buses and possibly diesel-powered rail cars.
The Senate Republicans’ sales tax plan might allow counties to have votes on quarter-cent tax increases, separated by several months, but Blue said that option is not permitted under legal agreements Wake has with its Triangle neighbors.
“That would make it basically impossible for Wake County to comply with provisions of the agreement they reached with Orange and Durham counties, to do the half-cent sales tax,” Blue said.