SUMMARY OF A JOINT MEETING BETWEEN
THE CHAPEL HILL TOWN COUNCIL AND MEMBERS OF THE SPECIAL LEGISLATIVE DELEGATION,
MONDAY, JUNE 20,1994
Mayor Broun called the joint meeting
to order at 8:08 a.m. Council Members
in attendance were Joe Capowski, Pat Evans, Lee Pavão, Barbara Powell and
Rosemary Waldorf. Council Members Joyce
Brown, Mark Chilton and Jim Protzman were unable to attend. State Representative Joe Hackney was also in
attendance. State Representative Anne
Barnes and State Senators Howard Lee and Russell Walker were unable to
attend. Also in attendance were Town
Manager Cal Horton, Assistant Town Managers Sonna Loewenthal and Florentine
Miller, Finance Director James Baker, Town Clerk Peter Richardson and Town
Attorney Ralph Karpinos.
Finance Director Baker presented an
overview on the issuance of Certificates of Participation relative to the
Town's parking facilities. He said the
Town would likely receive favorable interest rates on the basis of its A+ bond
rating. Council Member Capowski
inquired about projected savings from the issuance of the certificates. Mr. Baker said annual savings of $65,000 to
$85,000 were projected based on anticipated interest rates.
Mr. Baker also briefly reviewed the
status of revenues from intangible taxes, noting that the Town received
approximately $728,000 from this revenue source during the current fiscal
year. Mayor Broun noted that the bill
being proposed in the State Senate called for local governments to receive
three percent growth on these previously frozen revenues, compared to the
estimated annual growth of ten percent.
Intangibles Tax
Representative Hackney arrived at
8:14 a.m. Representative Hackney
reported that the House Finance Committee would be continuing its discussions
about possible replacements for the State's intangibles tax at its meeting on
June 21st. Mayor Broun inquired whether
local governments would be no worse off after passage of the proposed new bill
on this matter. Representative Hackney
said he did not think local governments would come out the same or better off
as a result of the current proposal.
Mr. Horton inquired whether the Senate bill was the most likely for
adoption relative to intangibles tax options.
Representative Hackney said he believed a derivation of the Senate bill
would be adopted.
Representative Hackney noted that the
North Carolina Court of Appeals had recently ruled that it was unconstitutional
to exempt in-state stocks from intangibles taxes while imposing the same tax on
out-of-state stocks. He stated that if
the North Carolina Supreme Court upheld this decision, it would mean a windfall
of up to $55 million for local governments.
Representative Hackney added that the possibility of providing
exemptions for closed corporations was also being explored. Council Member Waldorf inquired whether the
Court's decision would be received during the short session. Representative Hackney said no, noting that
the Court's next opinion date was July 17th, after the end of the short
legislative session. Council Member
Waldorf inquired what would occur on the basis of the Court's decision. Representative Hackney said the matter could
be taken up in the regular 1995 legislative session, if necessary. He also noted that 52% of intangible taxes were
collected on 7% of tax returns.
Mayor Broun inquired about
alternatives to the intangibles tax.
Representative Hackney presented a brief overview of the Senate Bill's
provisions. Mayor Broun asked whether
capital gains and ordinary income would be taxed under the terms of the
proposal. Representative Hackney said
this was correct. He added that the
main organizations opposing the proposed repeal of the intangibles tax were
Citizens for Business and Industry and members of the banking community.
Parks Fund Bill/Fire Protection
Funding
Representative Hackney said he was
not aware of any proposed challenges to the fire protection funding bill during
the short session. Council Member
Waldorf inquired who had opposed fire protection funding in the past. Representative Hackney said members of the
House Appropriations Subcommittee had previously opposed the funding. Mayor Broun inquired about the possibility
of increased fire protection funding. Representative Hackney said this would
not occur during the short session and was unlikely in the future. Council Member Capowski inquired about the
possibility of including additional fire protection funding in concert with
normal operating expenses for new buildings on the University and Hospital
campuses. Representative Hackney said
it might be a good idea to ask the University to include fire protection
funding requests along with its normal building operating expenses. He also suggested that the Council might
wish to consider contacting the fifteen other communities throughout the State
which received fire protection funding from the State of North Carolina.
Representative Hackney said although
funding for State parks had been approved in the State Senate during the last
session, there had been some resistance from the House Finance Committee
Co-Chair who felt that funds should be allocated annually, rather than
dedicated. Representative Hackney noted
that the proposed State budget would be debated on the House floor beginning at
5:00 p.m. today. He stated that
although there was a good chance for passage of State park funds, the prospects
for State funding of local parks were not as good. Mayor Broun inquired whether funding for passive and active
recreation were handled separately or together. Representative Hackney said there was no distinction in the State
budget between active and passive recreation.
Council Member Evans noted that State funding of parks and recreation
was very low compared to other states.
Representative Hackney said this was correct.
Open Meetings
Noting that he served on the
Conference Committee on open meetings, Representative Hackney noted that the
House and Senate had passed different bills on the subject of open
meetings. He said the one difference
between the bills concerned the need for a seven-day public notice prior to
local governments hiring certain appointed officials such as Managers and
Attorneys. Representative Hackney said
the Senate had agreed to drop this provision from its proposal. He noted that the open meetings bill would
be enacted without this provision.
Open Beverage Containers
Mayor Broun inquired about the
possibility of acting on regulations pertaining to the carrying of open
beverage containers during the short legislative session. Representative Hackney said it would be
necessary to tie this proposal to similar legislation already under
consideration. Mr. Karpinos said he
believed it was necessary for the Town to receive State enabling authority to
enforce regulations pertaining to consumption of alcoholic beverages on public
property. He added that Chapter 18B of
the State Statutes appeared to preclude local bills concerning alcoholic
beverage regulation. Representative
Hackney said this could possibly be brought up in a future legislative
session.
Powell Bill Funds
Council Member Capowski asked whether
Powell Bill funds could be used for sidewalk construction. Representative Hackney said he was not
certain about the status of this proposal.
Representative Hackney also said he could check on the status of this
proposal. Council Member Capowski
stated that most sidewalk construction was taking place on the Town's
periphery, in newer developments.
Council Member Capowski said that the Town needed greater flexibility to
use Powell Bill funds for sidewalk construction in older parts of the
Town. Representative Hackney said he
believed that the Town of Pittsboro had recently received authorization for
additional flexibility regarding the use of Powell Bill funds.
Repeal of Intangibles Tax
Representative Hackney inquired about
the Council's preferences on the proposed repeal of the intangibles tax. Council Member Capowski inquired about
efforts to protect short and long-term intangible tax revenues for local
governments. Representative Hackney
said protection of short-term revenues would be easier than protection of
long-term revenues. Council Member
Waldorf inquired about alternatives to the intangibles tax. Representative Hackney stated that although
a number of options had been discussed, there had been no consensus about an
alternative revenue source. Mr. Horton
stated that greater certainty of revenue appropriations would be an aid to
local governments.
Closing Remarks
Council Member Evans inquired about
deposit bills relative to bottles and cans.
Representative Hackney said a coalition effort in this regard had been
undertaken about eight to ten years ago.
He stated that opposition from bottling interests had blocked any
legislation at that time.
Representative Hackney added that it was unlikely that any bottle or can
deposit bills would be introduced in the near future.
Representative Hackney presented an
overview of the House Appropriations Committee budget priorities, including
emphases on public education and earmarking funds for the "Rainy Day"
fund. He noted that the proposed budget
would be debated on the House floor later in the evening. He stated that Senate deliberation of the
budget would take at least two more weeks.
The session concluded at 9:13 a.m.