NC Sen. David Hoyle's Letter to the Editor

Wed, 25 Jun 2008 00:00:00 +0000

Posted on Wed, Jun. 25, 2008

Repeal the transfer tax

From N.C. Sen. David Hoyle, D-Gaston:

I have been a long-time opponent of this so-called “home tax.” I believe that it is important to explain why it's an example of bad public policy and also explain how it was included in the overall budget last year and never received a fair vote.

As the Observer noted, last week the Senate voted overwhelmingly (by a 38-6 margin) for my legislation to repeal the land transfer tax option. While North Carolina's economy is doing better than a lot of other states, we are not immune from the economic downturn. In no area is this more evident than in the housing market.

Homeowners throughout our state are suffering and we are working hard to address their needs. I strongly supported a budget this year that works to stabilize the housing market and help protect homeowners from foreclosure.

I also know that we must remove any threat to home equity. That's why we must repeal the land transfer tax option. This continued threat of a land transfer tax could adversely affect homes sales and result in less money for counties because property taxes are their main source of revenue to build schools and fund other critical needs.

Last year, my colleagues and I were working hard to take the Medicaid burden off counties. We were trying to free up more money for counties to spend on school construction and address the rapid growth in our state. The Senate made a commitment to a permanent solution and we kept our word – and all counties benefited. By taking over Medicaid and a portion of the county's sales tax, we removed this burden and made sure that counties would benefit from it by up to $500,000 a year for three years. This was an incredibly complex issue, but we did the right thing.

The leadership of the House had other ideas about ways for counties to raise revenue. Their number one priority was the land transfer tax option. They made it clear that there would be no final budget agreement (and no Medicaid relief for counties) without including this tax option in our state budget. My Senate colleagues and I were faced with a difficult and unfair choice: oppose the whole budget, which funds everything from our schools and universities to roads and prisons, or go along with the House and vote for a budget including this tax. Our other option was to shut down the government.

The Senate passed Medicaid relief as a separate bill to keep it out of the budget negotiations, but to no avail. I made the tough call and I stand by it.

Since then, voters in 20 counties have had the chance to vote on the land transfer tax. All 20 counties have soundly rejected it, some by percentages higher than 90 percent.

The voters have spoken and we heard them loud and clear. I call on the House to follow our lead and repeal this unpopular and unfair threat to homeowners. The Senate held a clean up-or-down vote. I urge the House to do the same.

Senate reneges on deal with counties

Sun, 22 Jun 2008 00:00:00 +0000

From Charlotte.com

Here's the lesson the N.C. Senate taught local governments last week: Don't make a deal with the General Assembly. If it involves an unpopular law, the Senate may renege on the deal and pull the rug from under local governments.

Fortunately, the state House may be less willing to flee before the wrath of the real estate lobby. The House shows little interest in double-crossing counties that accepted in good faith last year on a complex deal involving paying for the non-federal share of the Medicaid program.

Medicaid costs had risen so swiftly in recent years that many counties found it all but impossible to pay their share of the costs. Legislative leaders agreed to lift that burden, but to help pay the state's new costs, lawmakers took away from counties a half-cent of sales tax that went to local governments. In return, lawmakers gave counties two ways to make up for the loss of sales taxes: With the approval of county voters, they could impose either a transfer tax on real estate sales or an additional 1/4 cent sales tax.

To no one's surprise, the transfer tax has been unpopular. Voters have rejected it in 20 counties; in a couple of others, the sales tax increase has been approved. Real estate interests have financed local campaigns against transfer tax proposals, and have now persuaded senators that the tax ought to be eliminated as an option in all counties, including the 80 that haven't considered it. Last week the Senate passed legislation to do that

That's an act of sheer arrogance. It presumes that lawmakers know better than local voters what the best choice is. And it ignores the fact that the law is working just fine. In the counties where it has been proposed, voters have exercised their right to say no. Perhaps in the future they'll decide differently if counties make a case they need more revenue. Or perhaps voters in most or all counties will continue to reject the transfer tax. That's democracy.

Eliminating the option does more than undermine local governments. It also deprives counties of a tool meant to help make up for the loss of the half-cent sales tax. If the legislature wants to kill the transfer tax, it should give back to counties the sale tax revenue it took away – or provide some other way for counties to raise adequate revenue to meet local needs. Any other course is utterly irresponsible.

Land transfer tax repeal heading to House

Thu, 19 Jun 2008 00:00:00 +0000

From the News and Observer:

RALEIGH, N.C. - The Senate has sent a bill to the House that would repeal a land transfer tax option for counties approved by the General Assembly just a year ago.

Senators gave final approval to the repeal bill Thursday by a vote of 38-6. The majority said the option should be eliminated because voters in 19 counties have failed to support the idea in referenda since last fall.

Senators approved an amendment that adjusts another option the General Assembly gave counties last year to raise their local sales tax by a quarter-cent. Democratic Sen. Doug Berger of Franklin County says the change will help persuade county voters to approve the sales tax option.

Counties get to keep the proceeds generated from raising either tax.

Senate Committee Agrees to Transfer Tax Appeal

Wed, 11 Jun 2008 17:05:32 +0000

Under the Dome, the political blog for the News and Observer reports the NC Senate Finance Committee voted today to repeal the transfer tax (more...)

News 14 Story on Transfer Tax

Wed, 11 Jun 2008 16:59:11 +0000

RALEIGH -- Realtors across the state are stepping up their efforts to fight any tax increase on the sale of a house. (more)