Realtors spend big to defeat land transfer tax

Many legislators scared, Kinnaird says

The N.C. Association of Realtors has spent about a half-million dollars on spreading its message outside the Legislative Building. The investment appears to be working inside as well.

Senators balked last week at giving counties the right to issue additional taxes on land transactions if local voters approve them in referenda. The rejection collapsed a Democratic plan that had appeared to end a standoff between the House and Senate over whether to keep temporary taxes and rid counties of their Medicaid expenses.

"A majority of the members of the General Assembly are opposed to a tax on homeownership," said Tim Kent, the association's chief executive officer. "We're very proud of the campaign that we have run to educate the citizens of this state as well as the legislators who represent them."

The 42,000-member association, the lobbying group for most of the state's active residential real estate agents, has spearheaded a multimedia campaign against what it calls the "NC Home Tax," which the group says would discourage potential first-time home buyers.

Last week, before a tentative deal broke down, the association spent more than $13,000 on local newspaper advertisements praising a dozen House members who spoke out against the tax, according to the group's records.

Other lawmakers fear they will be the target of campaign ads next year if they support the tax. The association's political action committee gave more than $600,000 to legislative candidates during the 2006 elections -- the most money by any political action committee.

"It's scaring the heck out of a lot of them," said Sen. Ellie Kinnaird, a Democrat from Orange County who supports the tax as a way to pay for surging growth in population and development, particularly in urban counties.

The Realtors association began its campaign in March, using a Web site, television and radio ads, and yard signs urging passers-by to "Stop the NC Home Tax."

Lobbying records filed with the Secretary of State's Office show the association has spent more than $475,000 this year on soliciting the public, with most if not all of the expenses linked to the campaign. Another political organization created by the group spent $25,000 more on the NC Home Tax campaign, Kent said.

Bob Hall of the campaign finance reform group Democracy North Carolina said the association could lose if the transfer tax is successful because it could hurt sales or cut into sales commissions.

"They have a very personal interest in this issue and are willing to invest a lot of money and essentially buy an outcome if that's what it takes," Hall said.

Kent said the association is acting appropriately and following lobbying rules.