FROM: W. Calvin Horton, Town Manager
Ralph D. Karpinos, Town Attorney
SUBJECT: Resolution Authorizing Potential Legislative Topics for Discussion
DATE: February 10, 2003
The attached resolution would authorize potential topics for discussion with the Orange County Legislative Delegation at the Legislative Breakfast on February 17 at the Sheraton Chapel Hill Hotel.
On January 29, the Council held a Public Forum on the 2003-04 Budget and Related Matters, and included discussion of potential Legislative items as part of the forum. That night, the Council identified two particular items of interest for discussion with the Legislative Delegation: (1) A common funding source for transportation infrastructure needs; and (2) equity of funding for Orange County within Highway Division 7. These issues are explained in more detail below.
While considering the Land Use Management Ordinance during 2002, the Council indicated interest in another potential item for discussion: the pursuit of enabling legislation to fund burial of electric distribution lines. We have included information about this topic below, and have provided an additional agenda item with tonight’s packet to provide more details.
We have also provided a copy of the May 13, 2002 Legislative Program as adopted by the Council. The Council may wish to consider potential items raised during last year’s discussions of Legislative issues (Attachment 1).
The Council will have further opportunity to discuss its potential Legislative goals through the process outlined later in this memorandum.
The General Assembly convened for its “long session” this year on January 29. The deadline for submission of local bills to Legislative Bill drafting is March 12 for the N.C. Senate and is yet to be determined for the N.C. House, although it is likely to be on or near March 12.
DISCUSSION
On January 29, the Council discussed possible legislative matters for potential consideration. Topics for discussion were:
· Common Funding Source for Transportation Infrastructure Needs. The Council suggested requesting an annual $50 million, distributed equitably through the region, to address transportation infrastructure needs. The 2001 Regional Transportation Strategy for the Research Triangle Region of North Carolina identified between $50 million and $60 million that could be raised through funding mechanisms such as increases to vehicle registration, driver’s license, or other fees, combined with a 2-cent fuel tax increase and revisions to the Highway Use Tax (Attachment 2). The Council emphasized that Chapel Hill’s interest would be in funding public transportation and not in building a greater number of roads.
· Equity of Funding for Orange County within Highway Division 7. Orange County has been included in Division 7 for purposes of administering the allocation of federal and State transportation funding as part of the State Transportation Allocation Formula. Division 7 is composed of Guilford, Orange, Alamance, Caswell, and Rockingham counties. The draft State Transportation Improvement Program would provide 70 cents per capita in funding to Orange County, below the Division average of $1.58 and all other counties except Alamance (Attachment 3). We believe that it would be reasonable to seek a larger proportion of funding in the Transportation Improvement Program, using the district’s average per capita revenue as a goal.
· A Funding Mechanism to Convert Overhead Power Distribution Lines to Underground Lines. If the Council were to pursue burial of electrical or other utility systems underground, special enabling legislation would be necessary in order to finance the project. The funding mechanism could involve formation of a Utility Tax District and/or the creation of a Municipal Service District with a special property tax. Utilities Commission and Duke Energy officials have stated that a “requesting party” is responsible for the cost of burying utility lines.
Past Topics
On May 13, 2002, the Council adopted the attached Resolution B, establishing Town Legislative Program guidelines, including:
· Provide Increased State Staffing for Sedimentation and Erosion Control Enforcement.
Also on May 13, 2002, the Council adopted the attached Resolution A, endorsing the N.C. League of Municipalities’ suggested statutory provisions and proposed Constitutional amendment to secure local reimbursements and State-collected local taxes endorsing selected revenue alternatives suggested by the N.C. Metropolitan Coalition. The additional sources endorsed by the Council were:
The Council may wish to consider adding matters to the list of those included in the proposed resolution or deleting some of those already listed.
NEXT STEPS
The tentative schedule to consider Legislative items includes the following dates:
· February 17, 7:30 a.m. – Breakfast with Orange County Legislative Delegation
· February 24, 7 p.m. – Resolution Calling a Hearing to Receive Public Comment on Legislative Items
· March 3, 7 p.m. – Public Hearing on Legislative Items and Adoption of Legislative Program.
· March 12 – Deadline for Legislative Bill drafting.
RECOMMENDATION
We recommend that the Council adopt the attached resolution, authorizing potential topics for discussion with the Orange County Legislative Delegation at the Legislative Breakfast on February 17 at the Sheraton Chapel Hill Hotel, with such further items as the Council may choose to identify.
ATTACHMENT
1. May 13, 2002 Adopted Legislative Program (p. 5).
2. Regional Transportation Strategy for the Research Triangle Region of North Carolina, 2001 (pages 13-20).
3. Division 7 Per Capita Draft STIP Funding (FY 2004-2010) (p. 21).
A RESOLUTION AUTHORIZING POTENTIAL TOPICS FOR DISCUSSION WITH THE ORANGE COUNTY LEGISLATIVE DELEGATION ON FEBRUARY 17, 2003 (2003-02-10/R-9)
WHEREAS, the Council of the Town of Chapel Hill is preparing a list of topics for discussion with the Orange County Legislative Delegation; and
WHEREAS, the Council will seek enabling legislation to undertake various projects throughout the year; and
WHEREAS, the Council will meet with Legislators at the Sheraton Chapel Hill Hotel on February 17 to discuss these and other matters of interest;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the following proposed topics for discussion as part of the Legislative Breakfast Meeting at 7:30 a.m., February 17, 2003, at the Sheraton Chapel Hill Hotel:
· Common Funding Source for Transportation Infrastructure Needs
· Equity of Funding for Orange County within Highway Division 7
· Funding Mechanism to Convert Overhead Power Distribution Lines to Underground Lines
BE IT FURTHER RESOLVED that the Council may wish to seek further advice on ways to:
· Provide Increased State Staffing for Sedimentation and Erosion Control Enforcement.
This the 10th day of February, 2003.
Agenda #11
MEMORANDUM
TO: Mayor and Town Council
FROM: W. Calvin Horton, Town Manager
Ralph D. Karpinos, Town Attorney
SUBJECT: Consideration of Legislative Program for 2002
DATE: May 13, 2002
Adoption of the attached Resolution A would endorse the N.C. League of Municipalities’ suggested statutory provisions and proposed Constitutional amendment to secure local reimbursements and State-collected local taxes. Adoption of the attached Resolution B would provide the Legislative Delegation with general guidance from the Council regarding the Town’s legislative program for the upcoming session of the N.C. General Assembly.
BACKGROUND AND DISCUSSION
On May 2, the Council met with Senators Lee and Kinnaird and Representatives Hackney and Insko to discuss potential legislative issues of interest to the Town. The discussion focused on the Council’s request to ensure protection of local revenues.
At the meeting, N.C. League of Municipalities’ Executive Director Ellis Hankins presented to the Legislative Delegation and the Council suggested statutory provisions and a Constitutional amendment to secure local reimbursements and State-collected local taxes (Attachment 1). Mr. Hankins said that two areas were the most crucial for local government revenue base: (1) State-collected local revenue (such as utility franchise taxes and beer and wine taxes); and (2) reimbursements for previously-repealed taxes (such as intangibles tax replacements and business inventory taxes). Mr. Hankins presented the League of Municipalities’ suggested options for how the General Assembly could protect local revenues:
1. Statutory provisions – The League’s proposal includes two sections: (A) A provision stating that State-collected taxes are levied “for the benefit of and on behalf of units of local government to the same extent and manner as if the levies were made by the respective local governing bodies.” (B) A provision stating that local governments must be able to rely on State-collected local revenues that the General Assembly has provided” and that such funds collected by the State for local governments shall not be withheld unless the Governor has “exhausted all other sources of revenue of the state including surplus remaining in the Treasury” and “unless authorized by an act of the General Assembly.”
2. Constitutional amendment – The League’s proposal includes a Constitutional amendment stating that the Governor may not withhold funds that have been collected by the State for local governments or otherwise committed to local governments “unless authorized by an act of the General Assembly.”
Following the breakfast meeting, the Manager and Attorney received the attached materials from the League (Attachment 2), encouraging local Mayors and Councils to support legislation as outlined in Resolution A.
On April 8, the Council held a public hearing on proposed legislative items for consideration by the N.C. General Assembly as part of its “short session” (Attachment 3). At that meeting, Mr. Roland Giduz asked for consideration of imposing a luxury tax in the Town and urged the Council to support such a tax. Mr. Giduz proposed a floor of $25-$30 per ticket, above which there would be a tax, with the exemption of certain cultural events (Attachment 4).
The Council had previous discussions earlier this year regarding legislative issues, including a February 25 meeting with the Legislative Delegation to discuss the State’s budget shortfall and its impact on the Town. On March 25, the Council adopted a resolution that included various potential issues for discussion with the Delegation, as noted in the “Legislative Program” section below.
The General Assembly convenes for its “short session” this year on May 28. The deadline for submittal of local bills to Legislative Bill Drafting is 4 p.m. on June 5 for the House and 4 p.m. June 12 for the Senate. Legislative rules require that during this “short session,” the principal sponsor of any local bill certify that no public hearing in the Legislature will be required or requested on the bill; that the bill is non-controversial; and that the bill is approved for introduction by each member of the local delegation.
LEGISLATIVE PROGRAM
On April 8, the Council held a public hearing on potential actions to:
We recognize that these proposals are not likely to be considered by the Legislature given the nature of ongoing budget discussions focusing on spending cuts rather than new revenue. However, we recommend that that Council offer this program as general guidance for the Delegation during 2002 and subsequent legislative sessions.
On March 25, the Council adopted a resolution endorsing selected revenue alternatives suggested by the N.C. Metropolitan Coalition (also with Attachment 3). The additional sources endorsed by the Council were as follows:
NEXT STEPS
Resolution A would endorse the N.C. League of Municipalities’ suggested statutory provisions and proposed Constitutional amendment to secure local reimbursements and State-collected local taxes.
Resolution B would provide the Legislative Delegation with general guidance from the Council regarding the Town’s legislative program for the upcoming session of the N.C. General Assembly. If the Council adopts the resolutions, we would transmit copies to members of the local Legislative Delegation.
RECOMMENDATION
That the Council adopt the attached Resolution A, endorsing the N.C. League of Municipalities’ suggested statutory provisions and proposed Constitutional amendment to secure local reimbursements and State-collected local taxes; and Resolution B, providing the Legislative Delegation with general guidance from the Council regarding the Town’s legislative program for the upcoming session of the N.C. General Assembly.
ATTACHMENTS
RESOLUTION A
A RESOLUTION REQUESTING THAT MUNICIPAL REVENUE SOURCES BE MADE SECURE AND ENDORSING THE NORTH CAROLINA LEAGUE OF MUNICIPALITIES’ SUGGESTED STATUTORY PROVISIONS AND PROPOSED CONSTITUTIONAL AMENDMENT TO SECURE LOCAL REIMBURSEMENTS AND STATE-COLLECTED TAXES (2002-05-13/R-16a)
WHEREAS, the Town of Chapel Hill is required by North Carolina law to operate and maintain a balanced budget and comply with the provisions of the Local Government Budget and Fiscal Control Act; and
WHEREAS, the Town is required to maintain a sufficient fund balance to operate in a fiscally-sound manner and to have adequate reserves in case of emergencies; and
WHEREAS, the Chapel Hill Town Council has a responsibility to provide for the health, safety, and well-being of the citizens of this community by providing necessary services; and
WHEREAS, the ability of municipal governments to borrow for capital infrastructure needs is dependent on reliable revenue sources for repayment; and
WHEREAS, adequate municipal revenue sources are required to carry out the above-mentioned responsibilities;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council respectfully requests that the General Assembly enact legislation that will secure the municipal revenue sources and ensure that these revenues are distributed to local governments on a timely basis as set forth by the State’s General Statutes.
BE IT FURTHER RESOLVED THAT the Council endorses the N.C. League of Municipalities’ suggested statutory provisions and proposed Constitutional amendment to secure local reimbursements and State-collected taxes, shown herein as Attachment 1.
This the 13th day of May, 2002.
RESOLUTION B
A RESOLUTION ESTABLISHING THE TOWN OF CHAPEL HILL’S LEGISLATIVE PROGRAM GUIDELINES FOR THE UPCOMING SESSION OF THE NORTH CAROLINA GENERAL ASSEMBLY (2002-05-13/R-16b)
WHEREAS, the Council of the Town of Chapel Hill held a public hearing on April 8, 2002, at 7 p.m. on proposed items for inclusion in the Town’s legislative program for the 2002 Short Session of the North Carolina General Assembly; and
WHEREAS, the Council conducted a meeting with the Orange County Legislative Delegation on May 2, 2002, to discuss potential legislative issues of interest to the Town and the impact of the State’s budget shortfall on the Town;
NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council hereby transmits the following as Legislative Program guidelines for consideration by the General Assembly in the upcoming Short Session:
This the 13th day of May, 2002.
ATTACHMENT 1
Suggested Statutory Provisions and Constitutional Amendment to secure the local reimbursements and state collected local taxes
1. Statutory provisions
The language in “A” should be placed in every section levying taxes and distributing all or a portion of the proceeds to local governments¾utility franchise taxes, Powell bill funds, beer and wine tax, etc. It will need to be modified to fit the particular tax section.)
(Explanatory Note: This language is taken from the previously repealed intangibles tax statutes, G.S. 105-198. The N.C. Supreme Court held in Yokley v. Clark, 262 N.C. 218 (1964), that in using this language the General Assembly had levied a local tax.)
The language in “B” should be added as a new section in the Executive Budget Act.
B. The General Assembly recognizes that it has required units of local government to adopt and maintain annual balanced budgets and take other steps to assure financially sound operations, under The Local Government Budget and Fiscal Control Act and other provisions of G.S. Chapter 159. Accordingly, the General Assembly finds that in order to satisfy those statutory requirements and provide adequate services to their citizens, units of local government must be able to rely on the funds and local revenue sources the General Assembly has provided.
It is the intent of the General Assembly that funds that have been collected by the State for units of local government or that otherwise have been committed by the General Assembly to units of local government by statute or any uncodified act shall not be reduced except as provided in this section. The Governor, in exercising the powers contained in Article III, Section 5(3) of the Constitution necessary to insure that the State does not incur a deficit during the period, or otherwise, shall not withhold from distribution funds that have been collected by the State for units of local government or that otherwise have been committed by the General Assembly to units of local government by statute or any uncodified act, unless he shall have exhausted all other sources of revenue of the state including surplus remaining in the Treasury at the beginning of the period, and unless authorized by an act of the General Assembly.
This section shall not be construed to authorize the Governor to withhold revenues from taxes the General Assembly has authorized governing bodies of units of local government to levy.
(Explanatory Note: The Constitution says that the General Assembly shall provide for the organization and operation of local government units. Article VII, Section 1. The General Assembly has abundant authority under the constitutional scheme to specify the order in which funds may be used or applied by the Governor to carry out his constitutional responsibility to maintain a balanced budget, at least so far as essential funds specifically allocated for local government units are concerned.)
2. Constitutional Amendment to be added to Article III, Section 5(3) of the Constitution
(3) Budget. The Governor shall prepare and recommend to the General Assembly a comprehensive budget of the anticipated revenue and proposed expenditures of the State for the ensuing fiscal period. The budget as enacted by the General Assembly shall be administered by the Governor.
The total expenditures of the State for the fiscal period covered by the budget shall not exceed the total of receipts during that fiscal period and the surplus remaining in the State Treasury at the beginning of the period. To insure that the State does not incur a deficit for any fiscal period, the Governor shall continually survey the collection of the revenue and shall effect the necessary economies in State expenditures, after first making adequate provision for the prompt payment of the principal of and interest on bonds and notes of the State according to their terms, whenever he determines that receipts during the fiscal period, when added to any surplus remaining in the State Treasury at the beginning of the period, will not be sufficient to meet budgeted expenditures. This section shall not be construed to impair the power of the State to issue its bonds and notes within the limitations imposed in Article V of this Constitution, nor to impair the obligation of bonds and notes of the State now outstanding or issued hereafter. The Governor may not withhold from distribution funds that have been collected by the State for units of local government or that otherwise have been committed by the General Assembly to units of local government by statute or any uncodified act unless authorized by an act of the General Assembly.
(Note: The bold underlined language is proposed to be added. The rest is existing language.)
ATTACHMENT 2
May 1, 2002
HIGHEST PRIORITY MEMORANDUM
TO: Mayors, Managers/Administrators/Clerks, and Attorneys
FROM: President Thomas M. Gwyn, Mayor of Elkin
S. Ellis Hankins, Executive Director
Andrew L. Romanet, Jr., General Counsel
SUBJECT: Legislation to protect local revenues
When the 2002 session convenes officially May 28, the League’s top priority will be to protect our local revenue sources, including the reimbursements for repealed local taxes and our state collected local revenues. Clearly the recent actions taken by Governor Easley to withhold local revenues have made this effort even more important.
To accomplish this goal, we will seek the introduction and passage of legislation that will restrict the authority of a governor to withhold local revenues that the General Assembly has provided to units of local government by statute or annual appropriations acts or otherwise. We also will seek a constitutional amendment to accomplish the same goal. We expect to be joined in this effort by the North Carolina Association of County Commissioners and others.
We enclose 1) the suggested revisions to state statutes that would protect our revenues and 2) a proposed constitutional amendment. We will pursue enactment of both, but if only one passes, we will be successful.
Your active involvement is crucial if we are to make your revenue sources secure. Please contact each member of your legislative delegation as soon as possible and secure his or her firm commitment to co-sponsor this legislation, including the proposed constitutional amendment, and to actively support and vote for the legislation. More specific suggestions on steps to take can be found on the attached sheet.
Also, please consider adopting the enclosed resolution and forwarding it to members of your legislative delegation.
|
|
|
I:\PRIVATE\Exec\ELLIS\revenue ltr.doc |
We can be successful in our effort, but only with the active and vocal support of our entire membership!