Legislative Update

N.C. Local Government Budget Association

Asheville, NC

December 13, 2013

Chris Nida, Policy & Communications Specialist

N.C. League of Municipalities

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Agenda• 2013 Session Overview• Look Ahead to 2014 Session– Interim studies

• Federal Issues• NCLM Policy Development• Stay Involved • NCLM Budget & Tax Rate Survey

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2013 Long Session Overview

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Session Overview• Building relationships was a major

key to success– Town Hall Day, Advocacy Goals

Conference, District Days!, All Hands on Deck

• Tax reform and budget among the critical achievements this session

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Tax ReformMunicipal Revenue Change ($ millions)

HB 998 Version  FY 13-14 FY 14-15 FY 15-16  FY 16-17  FY 17-18  FY 18-19

House 2.2 32.0 34.2 36.5   38.7  40.9

Senate 2nd Reading 3.3 -69.0 -130.0 -112.3  -99.8  -163.9 

Senate 3rd Reading 3.6 25.0 13.7 -25.5 -9.5 -10.1

Final Agreement 5.3 13.5 14.3 15.0 15.7 16.4

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Session Overview• Local control issues took center stage– Annexations and deannexations– Transfer of assets– Regionalization of utilities

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Session Overview• Transportation reform– Divides statewide transportation

revenues between three “tiers” of projects: State (40 percent), Regional (30 percent), Division (30 percent)

– Projects selected through combination of data-driven criteria and local input

Looking Ahead: 2014 Short Session

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Looking Ahead• Unknown future for House leadership• Senate leadership likely to remain intact• Several important issues on the horizon:

– Public records– Transportation funding– Hydraulic fracturing

• Session convenes: Wednesday, May 14, 2014• Town Hall Day: Wednesday, June 4, 2014

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MEC Rulemaking• Mining & Energy Commission – MEC is currently making rules related to

hydraulic fracturing; topics of interest to local governments include:• Baseline testing of groundwater and surface water

supplies• Water management• Waste management• Setbacks

Interim Studies

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Privilege License Study• HB 998 – Tax Simplification and

Reduction Act – HB 998 authorizes several tax reform-related

studies, including:• The authority of cities and counties to impose a

privilege tax on businesses and the various State privilege license taxes.

– Both reform and elimination of the privilege license tax were proposed during the session

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Environmental Review Commission (ERC) Studies

• HB 74 – Regulatory Reform Act of 2013 – Four studies authorized by HB 74:

• The statutory models for establishing, operating, and financing certain organizations that provide water and sewer services in the state

• The technical review of plans by non-professional engineers • The state stormwater programs, with a specific focus on

how partially impervious surfaces are treated in the calculation of built-upon area under those programs

• The circumstances under which cities and counties should be authorized to enact environment ordinances

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Legislative Research Commission (LRC) Studies

• The General Assembly will also be studying the following issues, which have relevance to local governments:– A review of all issues related to water quality in Jordan Lake– The establishment of a property owner protection act,

including awarding attorney’s fees to property owners in the event of litigation against a local government

– Allowable uses of local government public enterprise system funds

– Responsibility for maintenance of infrastructure on foreclosed or abandoned properties

– Policies and roles related to wetland and stream mitigation

Interim Committees

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Revenue Laws Study Committee

• Outstanding issues related to tax reform– Expansion of sales tax to admissions– Utility franchise tax changes– Expiration of tax credits

• Dept. of Revenue staffing

• Tax & Tag Together

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Joint Legislative Committee on Local Government

• Heard presentations Monday related to local debt– Representatives from LGC, NCACC, bond attorneys, and

lenders addressed committee– Raleigh CFO Perry James presented city perspective– Relatively few questions from committee members

Federal Issues

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Federal Issues• Biggert-Waters Act– Passed in 2012 and designed to ensure

solvency of the National Flood Insurance Program

– Many property owners, especially in coastal areas, have seen significant flood insurance rates due to implementation

– Homeowner Flood Insurance Affordability Act proposal supported by NCLM and NLC

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Federal Issues• Water Resources Reform and Development

Act– US House version of the bill does not allow for

extension of federal cost-sharing partnerships for beach renourishment

– Carolina Beach first in the nation to expire, beginning in 2014

– House and Senate currently in conference committee

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Federal Issues• Marketplace Fairness Act– Passed by US Senate to allow local

governments to collect internet sales taxes– Has not received hearing in House– US Supreme Court elected not to hear a case

on the issue– Supported by NCLM and NLC

NCLM Policy Development

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NCLM Policy Development• Legislative goals set by membership in even-

numbered years• Membership may submit goals June – August• LACs/RAC votes on goals to forward to the Board

of Directors• Member review November – January• Advocacy Goals Conference January 2015

Stay Involved

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Stay Involved• Consider joining a policy committee:

– Tax & Finance– Planning & Environment– General Government

• Get involved at the national level through NLC• Town Hall Day – June 4

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Stay Involved• Connect with the League’s legislative communications

– LeagueLINC Grassroots Online– LINC Bulletin – Weekly during session– LINC’ed IN– Action Alerts– News & Notes– ECOLinc Newsletter

• Let us know how we can help– Arranging visits, setting up meetings, etc.– LeagueLINC@nclm.org

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Bill tracking• Provides NCLM staff summaries of

key legislation, with links to NCLM bulletins and memos for more information

• Look up bills by number or topic• View the priority of the issue for

the League• See up-to-date information on

each bill, pulled from the N.C. General Assembly website

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LeagueLINC Bulletin

Sign up for the League’s LeagueLINC Bulletin, published weekly during the

legislative session, by emailing LeagueLINC@nclm.org

NCLM Budget & Tax Rate Survey

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Preliminary Results

FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-140%

10%20%30%40%50%60%70%80%90%

100%

Revenues Better Able to Support Spend-ing and Increased Tax Rates

Projected revenues better able to support your spending requirements than previous yearTax Rate Increase

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Preliminary Results

Implemented new fees and charges for services

Cut spending specific programs/departments below previous FY budget

Reduced actual capital spending below previous FY levels

Appropriated more fund balance than in previous FY

Raised Tax Rate

Contracted out additional services

Reduced service levels

Brought back in-house services previously contracted out

0% 10% 20% 30% 40% 50% 60%

Budget-Balancing Strategies FY 2013-14 and FY 2012-13, All Municipalities

FY 13-14FY 12-13

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Questions and Comments?

Chris Nida, Policy & Communications SpecialistOffice: (919) 715-3945Mobile: (919) 609-8671

cnida@nclm.org