On May 29 North Carolina Gov. Pat McCrory signed into law a bill passed last week by the North Carolina General Assembly to repeal the municipal privilege license fee charged by municipalities to businesses operating within their borders. The repeal takes effect July 1, 2015.
With this news, the city of Wilmington began planning for what could be a $1.7 million shortfall in revenues for the fiscal year 2014-15 budget.
While the bill allows for a majority of municipalities to collect revenues for privilege license taxes billed for July 2014, the city of Wilmington is one of only about seven municipalities state-wide that bill for privilege licenses on May 1. With that cycle, the city would only be able to prorate the 2015 privilege licenses bills for two months, from May 1-July 1, and those revenues are currently included in the city’s 2014-15 budget.
In a presentation to Wilmington City Council during its agenda briefing on Monday, June 2, city legislative affairs liaison Tony McEwen said he is working with leadership in the Senate to make sure Wilmington has the same one-year buffer as the municipalities that bill on July 1.
The estimated $1.7 million in lost revenue revenues represents an additional 1.36 percent property tax increase, one of the only options left for the city, said Councilman Kevin O’Grady.
“We have to fill that hole and now we have a narrower tax base and we would have to go to the broader tax base, which is property taxes,” O’Grady said during city council’s Tuesday, June 3 meeting. “What our state government is doing is taking away revenue for us and they are either forcing us to reduce services or raise property taxes.”
During McEwan’s legislative update he said he hopes to find out if the city will be able to fully collect the 2015 privilege license taxes before the city has to finalize the new budget, which would take effect July 1, 2015.
Yet, city council took the first steps in approving the 2014-15 budget during its Tuesday meeting by unanimously approving the first reading of three ordinances making appropriations to the general fund, grant projects fund, enterprise funds, debt service fund and capital projects fund.
Those ordinances included the $274,486 increase to general fund budget from new appropriations city council made during its Monday, June 2, budget work session. That total included an additional $5,000 to The Arts Council of Wilmington; $100,000 to affordable home rehabilitation programs; $30,000 for Wilmington Downtown Inc. to complete a study of the proposed downtown Municipal Service District; $89,486 for a new fulltime position and equipment for city parks and tree maintenance and $50,000 for economic business incentives.
City council will vote on the second reading of the budget ordinances during its next meeting on Tuesday, June 17.
Police Cruisers
Wilmington City Council also approved the purchase of 22 new police patrol cars during the consent agenda segment of its Tuesday, June 3, meeting. The new patrol cars, funded in the fiscal year 2013-14 budget, will cost $500,346 and will be painted in a new black-and-white paint scheme. The pattern will replace the existing white patrol cars with yellow and blue lettering.
City council unanimously approved the resolution but Councilwoman Laura Padgett said the new paint scheme appeared too intimidating and that she would have preferred for council to have more design input.
Wilmington Police Chief Ralph Evangelous said the new colors would better identify the patrol cars as police vehicles and the new lettering on the side and back of the cars would be more visible at night.
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