AG 1993 03 15 - Laserfiche WebLink

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SECTION D. 1. PROPOSED LEGISLATION OF CONCERN Local Financial Security Manager Recommendation: Support NORTH CAROLINA ASSOCIATION OF COUNTY COMMISSIONERS MEMO RA.N33USI TO: FROM: DATE: SUB.rECT: County Managers Jim Blackburn, General Counsel December 23, 1992 "Local Financial Security" Legislation ~- C E ~--V ED The State-Local Relations Subcomardnee of the Fiscal Trends and Reform Corn.mission has recommended to the full Comm]ss]on ]e=*islation to deal with an issue of major importance local gevenzments in North C~rol~a. The full Commission is scheduled to consider the recommendations next week. The legislation is tentatively entitled "An Act to give Local Government Units More Financial Security rind Restore Growth to State-Col]octet Local Revenues and Tax-Sharing Funds." It is designed to accomplish two purposes. FLrst, it would complete the effort begun in 1992 to provide for automatic distribution of state payments to local governments in two general areas' (1) reimbursements to local govern_ments for revenues lost because of General Assembly a~ that reduced local tax revenues (repeal of inventory and some intangibles taxes, exemption ox food stamp purchases from sales tax and the Homestead Exemption, and (2) taxes that are local revenue sources but we collected by the state a;3d dls~buted to local governments (remaining intangibles taxes, beer and wine taxes ~.nd utility francbJse taxes). The security of all of these local revenue sources has been ha jeopardy since the ratification of Chapter 813 of the 1989 Session Laws (House Bill 2377) in 3'une of 1990. The 1990 ]eglslation made all of these funds subject to the -~-ppropriafions process ~nd was part of the legislative effort to dom with the budget crisis hcing the state at that time. Legislation enacted in 1992, Chapter 993 of the 1991 Session Laws (House Bill 916) provided for automatic dish'/but]on (rather than appropriation) of the first of these two fund sources, the "reimbursements". The second purpose to be accomplished by the proposed legislation deals with another problem that resulted from the Legislature's budget-balancing effort, the 1991 freeze on the amounts of all these revenues that were distributed by the state. Tiffs freeze c~used local governments to lose the growth in those fund sources that grew namral]y or were indexed to provide for automatic growth. T'.e proposed legtshtion would restore tkis growth to the state-collected, local revenue fund source with the result that local goverm'nents would lose only the growth from the current biennium that w~.s withheld tn order to balance the State's budget.