A watered-down version of a once controversial change to special property tax districts is headed to Gov. Pat McCrory’s desk after a unanimous N.C. Senate vote Wednesday.
Last year, Republican Sen. Trudy Wade of Guilford County inserted a provision in the Senate budget that would allow residents of the tax districts – known as municipal service districts – to repeal a tax through a referendum vote. The service districts are typically used to add an additional property tax for downtown development, historic neighborhood preservation or beach maintenance.
The move prompted outcry from a number of cities. Raleigh, Durham, Chapel Hill and Smithfield are among the Triangle towns with a downtown municipal service district. The Downtown Raleigh Alliance, which is funded by a property tax of 7.9 cents per $100 of property value, worried the referendum process would mean business interests don’t get a voice in the group’s future.
The provision was removed from the final budget, and legislators decided instead to form a committee to study the issue. That group proposed the bill, sponsored by Wade, that cleared the House and Senate this month.
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The bill calls for transparency requirements that would allow the public to access information about contractors and subcontractors hired with revenue from the special tax. And it sets out processes for property owners to petition for a new municipal service district or to have their property exempted from a service district tax if they can prove they don’t need the services provided.
Wade noted Wednesday that the bill has support from the N.C. League of Municipalities, a group she’s often been at odds with. “I might frame this, it might be the first time and the last,” she said of the League’s endorsement.