We’re in a tight spotPublished 7:43pm Wednesday, August 13, 2014
While it comes as a welcome reprieve for many business owners, the decision by the North Carolina General Assembly to do away with the business privilege license tax will have ramifications for residents across the state. City governments are scrambling to figure out how the looming holes in their budgets are going to be filled.
The legislators who voted the ban on business privilege taxes into the existence have vaguely stated they will try to help city governments come up with ways to fill those budget holes. But right now, it looks like cities will have only two options: cut services or raise taxes and fees.
So what does that mean?
For Washington, that means the city finds a way to cut $120,000 out of its budget. Perhaps that means eliminating a few jobs. Perhaps that means raising city taxes. And perhaps that means the fees for renting Festival Park go up, membership at the aquatic center goes up and league fees to use the sports fields go up.
But another way Washington may find $120,000 is by limiting services open to everyone in the county now, to the people who pay the taxes to support those services only.
Washington residents’ tax dollars pay for the operation of Brown Library, which is open to everyone in the county. They pay for the Grace Harwell Senior Center —services of which are open to everyone in the county. How much money does Washington receive from the county to recoup their losses? County residents get for free what Washington residents pay for.
Unfortunately, one of the results of the General Assembly’s decision might be to draw lines — lines between city and county residents that look remarkably like the city limits.
Somewhere, somehow, city staff is going to have to find a way to either strike $120,000 of the budget or ask Washington residents to pay more. That is, unless the General Assembly finds a way to throw some money at the mess they’ve made in cities across the state.