The Daily Tar Heel

Serving the students and the University community since 1893

Thursday May 26th

Easley's Proposal Gives, Takes From Towns

The proposed state budget includes both positive and negative implications for local governments statewide. In comparison to places such as Durham and Chatham counties, Orange County, along with Chapel Hill and Carrboro, was spared the brunt of the damage.

The governor has decided to hold $333 million in reimbursements from the towns of North Carolina, the same type of money withheld in the budget shortfalls of the last fiscal year. This cut would take away more than $700,000 from Chapel Hill, $250,000 from Carrboro and more than $3 million from Orange County. However, the proposed budget is not all bad news for the municipalities.

Easley has voiced his support for a half-cent sales tax increase requested by the local governments. In the cases of Chapel Hill, Carrboro and Orange County, the increase would surpass the amounts withheld by the state. Chapel Hill would take in $1.25 million, Carrboro would receive $450,000 and Orange County would gain $3.2 million. When all is said and done, each body would gain more money than it would lose.

Robert Morgan, Carrboro town manager, said the half-cent sales tax increase is a boon for local governments but that it isn't enough.

"We have to estimate our revenues just like the state, and then they come in and rob us," he said. "The local governments need some protection."

The protection Morgan referred to is legislation being introduced in the N.C. General Assembly to restrict the governor's ability to withhold reimbursements for local governments.

"This all began four years ago when (the state) talked about taking the money and then they actually did," Morgan said. "The state had no right to take the town's money. By doing so, they took the chaos at the state level and spread it to the towns. The state's problems should stay the state's."

Despite Easley's willingness to support a half-cent sales tax increase, Morgan cautioned against "counting the eggs" yet.

"The General Assembly has to approve this before we can act on it," he said. "If they do, we will be looking at a much different budget."

Morgan added that since his initial budget proposal, he has reduced his requested town tax increase from 7 cents to 5 1/2 cents.

Moses Carey, an Orange County commissioner, said the reimbursements are being focused on too heavily.

"We need to find other sources of revenue, sources the General Assembly won't let us utilize," Carey said. "I think (Easley's proposed lottery) is a long shot at best.

"I don't know how we're going to get out of this."

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