Bills Won't Allow State to Withhold

In the past, Easley has withheld revenue in several reimbursement funds to local governments -- such as taxes on beer and wine, franchise taxes, taxes on telecommunications and taxes on natural gas -- to deal with the state's budget deficit.

Two House bills, along with identical companion bills in the Senate, were proposed last week by legislators hoping to protect these sources of local revenue, as well as bring stability to municipal budgets.

Rep. Wayne Goodwin, D-Montgomery, said he believes that for local governments to operate efficiently, their funds must be fully accessible.

"More than any other issue, our constituents are asking for a stable flow of revenue to provide services in our counties and communities," he said. "It is our responsibility to see that legislation is passed to ensure that local revenues will not be withheld."

Goodwin also said it is important for the state not to infringe upon municipalities so local governments are able to retain their delegation of power.

"This legislation is critical because it will ensure that more than $250 million will be available to distribute to local sectors of law enforcement, health care, public libraries, transportation and much more," he said.

A majority of the members in both the House and Senate have also co-sponsored a constitutional amendment limiting the governor's ability to withhold local revenue without the approval of the General Assembly.

Legislative leaders such as Senate Majority Leader Tony Rand, D-Cumberland, and David Hoyle, D-Cleveland, chairman of the Senate Finance Committee, have supported the bills, making the possibility of the retention of local revenue more probable.

S. Ellis Hankins, director of the N.C. League of Municipalities, which represents local government in the state, says the implications of these bills on the budget crisis are critical.

"It is imperative for the General Assembly to pass a sound and balanced budget without impounding the local revenue base," he said. "Permanent state statutes in our constitution require this."

Dennis Marstall, assistant to Charlotte mayor Pat McCrory, said local government can set the tone for responsible budgeting for the state to model after.

"Hopefully the impact of this legislation will affect local governments by protecting their revenue and allowing them to be flexible," he said. "But it can also serve as a mechanism in forcing the state to plan accordingly and to be more creative in their approach to clearing the budget deficit."

Rep. Pryor Gibson, D-Anson, said this piece of legislation should have little impact on the budget crisis for the next fiscal year.

"The fact that we're not talking about state money means that the state budget should not be affected," he said. "This is city money, and it should be used to offer relief to municipalities."

Critics of Easley's actions to withhold funding say he is making the budget shortfall a local burden by passing the state problems down to the local level.

But Gibson also defended Easley, saying, "We must realize that the governor is in a tough position and is making difficult choices.

"It is up to all of us as legislators to represent our districts and allow for efficient policy making, as well as avoiding possible conflict with government on a state level."

Easley has stated that he is opposed to any constitutional amendment regarding local funding. But he has not ruled out the possibility of supporting a statutory provision on the issue.

Changes in state statutes, however, would only be temporary, thus allowing for future revision.

"Our purpose in drafting these bills is to first clarify statutory language in relation to the governor's access of local funds," says Gibson. "On top of that, we intend to list these revenues specifically through a constitutional amendment."

Constitutional amendments in North Carolina require approval from a majority of voters in a statewide referendum before they can be passed into law.

The State & National Editor can be reached at stntdesk@unc.edu.