[Durham INC] Builders to get tax break

[Melissa Rooney]

See HS news article below.

Looks like builders and developers won't have to pay the full cost of their increasingly empty storefronts and houses....

Too bad we citizens don't get to defer our taxes in hard economic times...quite the contrary, since we're going to have to make up for the development industry's shortfalls.

And we're supposed to believe the argument that development pays for itself...

Melissa



Melissa has asked us to send you the following article, which can also be found online at:

				
http://heraldsun.southernheadlines.com/durham/4-1177372.cfm?
				


				
				
				
		

		
		
		
			
		
		
			Senate panel endorses deferring taxes
			
		
		
		
			
		
	
		

		
		
		
			By Ray Gronberg
			
		
			
			 : The Herald-Sun
			
		
		
			
			
				
				
			
		
		
			
			
			
gronberg at heraldsun.com
			
		
		
			
			
Jul 2, 2009
			
		
		
		
		


		
		 
		 
		
		
		


		
		
		
			
			
		
		
			
				
					
			 
		
		DURHAM -- A bill that would cost local governments around the state an estimated $37 million to $45 million in deferred property taxes early next decade picked up an endorsement Wednesday from the N.C. Senate's Finance Committee.    


The committee's support, offered in a voice vote, clears the way for the full Senate to pass the bill on Wednesday. The same version has already passed the state House.    


Supporters say the bill, which allows builders to hold back property-tax payments on unsold residences for up to three years, will help stimulate the economy and stabilize neighborhoods.    


For small builders, the bill "could be the difference between them going under and being able to stay in business," Lisa Martin, a lobbyist for the N.C. Home Builders Association, told Senate Finance Committee members on Wednesday.    


As drafted, the tax deferral would apply only to the structures a builder places on a site. The land itself would remain taxable at full value. The deferred taxes would have to be paid after three years or when a home is sold.    


The deferral also wouldn't have any effect on local government budgets in fiscal 2009-10, a stipulation that won the bill a lukewarm endorsement Wednesday from the N.C. Association of County Commissioners, the lobbying group of county governments around the state.    


The General Assembly's fiscal research staff estimates that the deferrals, statewide, will take $30 million to $35 million out of local government budgets in fiscal 2010-11. The bite will likely drop to $7 million to $10 million in fiscal 2011-12, analysts said.    


Beyond that, "the program is expected to have a minimal impact and then a positive impact as the housing market recovers and past deferrals are paid," according to a memo prepared by Fiscal Research Division staffer Rodney Bizzell.    


Here in Durham, Tax Administrator Kim Simpson says the deferral's effects in fiscal 2010-11 and beyond are hard to gauge.     


But had it applied to the fiscal 2009-10 budget, the county would have lost nearly $1.6 million in revenue and the city $1.1 million, she said.    


The Fiscal Research Division's numbers are based on estimates another group, the N.C. Association of Assessing Officers, gathered from Durham and other counties around the state.    


Division staffers assumed revenue losses for fiscal 2010-11 would be 25 percent lower than they would have this year had the deferral been made immediate, and an additional 25 percent lower in fiscal 2011-12.    


The Senate Finance Committee's voice vote Wednesday was unanimous. Locally, Sens. Ellie Kinnaird, D-Orange, and Bob Atwater, D-Chatham, supported the measure.     


State Reps. Paul Luebke, D-Durham, Mickey Michaux, D-Durham, Winkie Wilkins, D-Person, and Bill Faison, D-Orange voted for the measure in the House last week. The only local opposition to it came from Rep. Verla Insko, D-Orange.    


Wednesday's vote, despite its unanimity, was not without controversy.    


Kinnaird got the bill's main Senate sponsor, Senate Majority Leader Tony Rand, D-Cumberland, to admit homebuyers might wind up on the hook for paying the deferred taxes.    


Taxes will be due at closing and the responsibility for paying them will be "negotiated between the parties," Rand said.    


Two officials from Johnston County, County Commissioner Ray Woodall and Tax Administrator Pat Goddard, spoke against the bill. "The home building industry is hurting, no doubt, but there are other industries hurting as well," Woodall said, adding that his government is in line to lose about $1 million.    


But their complaints drew a pointed rebuke from a Finance Committee co-chairman, Sen. Dan Clodfelter, D-Mecklenburg.     


He questioned Woodall and Goodard on how much money Johnston County had set aside in savings. When apprised of the figure, he pointed out it was well above the N.C. Local Government Commission's minimum guideline of 8 percent of annual appropriations.    


Few governments, however, save the minimum, both for cash-flow reasons and because the 8 percent guideline isn't high enough to assure them of receiving favorable terms on bonds and other loans.    


In Durham, Simpson said she'd asked elected officials to speak against the bill.    


"We don't like to take positions always, but it's getting to the point we're having to," she said. "If we started doing everything that's put out there [in proposed tax breaks], we would have no tax base." 
		
		
		


		
		 
		 
		
		
	
		

© 2009 by The Durham Herald Company. All rights reserved.

	
				 
				


      
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.deltaforce.net/mailman/private/inc-list/attachments/20090713/9c7f5dd9/attachment.htm>