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Sales Tax Cap Debate Proves Contentious But Passes NC Senate

On Wednesday, the North Carolina Senate passed a bill capping county sales tax rates at 2.5 percent.

The vote was 33 to 16.   

The final tally came after more than an hour of contentious debate.

North Carolina’s urban vs. rural divide was front and center throughout the debate.  

Supporters of the tax bill, including its sponsor, Senator Rick Gunn, said the measure simply levels the playing field for all counties. "We’re going to be able to give local communities something they haven’t had in terms of their sales tax which is far more flexibility in terms of education."

More flexible because it eases restrictions on when counties can call for sales referendums. 

That’s true for rural counties.

But for urban counties that already have a local sales tax rate at or above the 2.5 percent cap, it’s a different story.

Senator Josh Stein of Wake County said the cap which is attached to a job creation bill, would effectively kill jobs by limiting the options of urban centers that create most of the jobs in the state. Areas like the Research Triangle or RTP. "You all think an employer is deciding whether to locate in RTP or some rural eastern North Carolina county?" That’s not the choice said Stein. "The choice is do we go to RTP or do we go to San Jose; Austin, Texas; Northern Virginia; Boston."

Senator Bob Rucho of Mecklenburg supports the tax bill. And he said Stein was missing the point. "I can't understand how can anyone think making it easier for some of the low wealth, smaller counties to take part in the prosperity of North Carolina is wrong."

Senator Jeff Jackson, also of Mecklenburg, spoke out against the measure. Albeit oddly.

First he compared it to a bad use of condiments. "This bill is like a big delicious hamburger that somebody ruins by squirting mayonnaise all over it. I can’t eat it, this is gross."

Then, alluding to another bill passed this session that directly affects Charlotte and Mecklenburg County, Jackson seemed to reference a well known poem about the holocaust. 

"First they came for the airport, now they’re coming for every registered voter in Mecklenburg county. This bill strips every registered voter in Mecklenburg county of their right to vote for higher teacher salaries."

A referendum this November would let voters decide to raise the county sales tax by a quarter percent. The extra money would go largely to teacher pay.

But that quarter percent would put Mecklenburg over the cap, which means if this bill does become law, the referendum wouldn’t matter.

The sales tax bill is expected to pass a final procedural vote in the Senate as early as today. Then it would go to the House for consideration.