N.C. revenues for counties, towns expected to drop more

Published 12:41 pm Friday, June 11, 2010

After attending a N.C. Association of County Commissioners (NCACC) Legislative Day recently, Polk County Manager Ryan Whitson says the outlook is bleak for counties and towns in terms of future state revenues.

Whitson says its like counties and towns are sitting in the middle of the road waiting for a Mack truck to hit them. He predicts the real revenue problems will hit counties and towns in North Carolina next year.

Whitson and county chair Cindy Walker attended the legislative day in Raleigh about three weeks ago.

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Besides revenue problems, several other issues were discussed. Following are summaries provided by the NCACC on some of the issues the state legislation is working on that could affect local governments in the future:

ABC system

Over the past several months, a handful of local ABC boards have come under scrutiny for perceived ethical issues, leading to more calls to reform the ABC system. Currently, 167 local ABC boards operate 410 stores, which are in 98 of the 100 counties. Cities and counties annually receive approximately $40 million to $60 million in revenues from the local ABC boards. The state ABC Commission determines which products will be sold, sets the prices and housed the inventory in a state warehouse.

In 2008, the N.C. General Assembly asked its program evaluation division to study the current ABC system. Its study concluded that the state ABC Commission lacked the ability to effectively and efficiently manage the ABC system and made numerous recommendations to improve the system, many of which would grant more centralized control and authority to the state ABC Commission.

As a result of the ABC Study Committees recommendations, S1112 and H1217 were introduced during the first week of the short session. The NCACC says it will be carefully watching the development of the reform bills and will strongly oppose any provision that will dilute county revenues, impact the ability of local governments to contract for local law enforcement efforts or impact the autonomy of counties in the oversight of the ABC system.


The Intergovernmental Relations Steering Committee began studying annexation in 2008 and appointed a subcommittee to look at the law in more detail. H524 passed the House in 2009 and has been referred to Senate Finance. It is eligible for action in the short session.

The bill has many elements that the NCACC supports, but the legislation allows for a referendum if a citizen can get at least 15 percent of the registered voters in the area to be annexed and the receiving municipality to sign a petition. The NCACC seeks a referendum if certain services are already in place for the area to be annexed. The legislation does not require the municipality to reimburse the county for lost sales taxes, but it does require the Local Government Commission to conduct a financial analysis, with authority to stop the annexation or reverse it if needed.

There are four Senate annexation bills: S148, S472, S494 and S711, all of which are in a subcommittee of Senate Finance.

The NCACC will seek amendments to H524 that would require a referendum in cases of involuntary annexation if water/sewer and solid waste services are already available to the annexed area, and that would require the annexing municipality to reimburse the loss of sales tax revenue to the county.

Inmate shift to counties

The Justice and Public Safety Appropriations Subcommittee may consider requiring counties to house misdemeanants who have sentences of up to 180 days- a move that would save the state millions of dollars but would shift costs to counties and would increase the inmate population in already overcrowded county jails. As it stands, counties are required to house misdemeanants who are sentenced to up to 90 days. During the 2009 long session, a House budget provision was introduced that would have raised the inmate stay up to 180 days in county jails. This major policy shift would have cost counties an estimated $42 million per year. The NCACC and the Sheriffs Association opposed the provision, which was eventually taken out of the budget.

In the 2010 short session, the Senate and House Justice and Public Safety subcommittee may examine this issue again depending upon the states budget deficit. The NCACC and Sheriffs Association vehemently oppose raising the length of stay of inmates in county jails. Proactive steps are being taken to inform the chairs of the justice and public safety subcommittee of the disastrous effects of raising the inmate stay to 180 days.

Safe artificial slope construction

This proposal is a study committee recommendation to “1) require local governments to adopt ordinances to regulate site planning, design and construction of artificial slopes in mountainous areas to promote safe and stable slopes for development, to reduce the likelihood of slope failures on developed or disturbed land, and to protect human safety and property, and 2) direct the sedimentation control commission to assist local governments in development and implementation of safe slope construction programs and to develop a model ordinance.

The bill would apply to development in an area defined as located on a slope or hillside that has a slope of 40 percent or greater or is designated with a slide hazard ranking of moderate or high on a stability index map prepared by the North Carolina Geological Survey.

The sedimentation control commission would identify jurisdictions that would be required to adopt ordinances controlling development in affected areas.

The NCACC has not taken a position on this proposal. It does say, however, that it is concerned about the degree to which approval of the bill would preempt local ability to regulate development, impose costs within planning departments that would not be covered by authorized fees and discourage development in western and northwestern counties.