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Kleinschmidt Comments On Tax Reform For Chapel Hill Residents

By Lauren Grady Posted July 23, 2013 at 7:01 am

CHAPEL HILL – Chapel Hill Mayor Mark Kleinschmidt says you may start seeing more people in need of services that the state no longer provides for due to the recent tax reform passed by the North Carolina legislature last Wednesday.

He says replacing the three-tier progressive income tax with a flat 5.8-percent tax will hurt Chapel Hill’s lower class.

“For the people of our community, it’s not going to be helpful,” says Mayor Kleinschmidt. “This is not reform that is making our state a better place. It’s not reform that’s helping to lead to the provision of higher quality government services, services that people rely on, services that the private sector and nonprofit sector are not able to provide. We’re actually pushing the burden down to people of lower incomes and relieving those people of higher incomes from paying their fair share.”

Statistics show that Chapel Hill is expected to gain more than six million dollars in additional revenue over the next six years due to the tax reform legislation.

Mayor Kleinschmidt says even though town revenues are not expected to show a huge decline, the people will still face a burden.

“As this tax reform package continues to add this increased burden on people with lower income, that really just drives the need for high quality services and providing those services down to local government,” says Kleinschmidt. “While the town revenues may be held somewhat even, here in our local community we’re going to see more and more people in need of services the state’s not providing for anymore because they’re not going to have the same revenues that they had previously.”

Mayor Kleinschmidt says that taxes that are local revenue are collected by the state. He says there was fear that the North Carolina government will keep that revenue instead of returning it to Chapel Hill. But, he says that is not the case for the fate of local revenues, so Chapel Hill does not need to change its budget for the coming year.

While writing the renovated tax code, legislators hosted the League of Municipalities’ Town Hall Day on March 27, when the first drafts of the tax reform legislation were made public. District Days! was held for three months starting in April with the goal to bring small groups of government officials to Raleigh to collaborate with leaders in the legislature and lawmakers.

Paul Meyer, Director of Governmental Affairs for the North Carolina League of Municipalities, sent an e-mail to Roger Stancil, Town Manager of Chapel Hill, emphasizing how voicing opinions to legislators made a difference in the tax reform and Chapel Hill’s town revenues.

Mayor Kleinschmidt says he agrees that having relationships with lawmakers to influence legislation is very important in creating new policies.

“I maintain very strong relationships with every member of our local delegation and members of both houses outside of Chapel Hill,” said Kleinschmidt. “Those kinds of relationships, being able to about policies that have the potential for impacting us is an important part of the process. Just as the people of Chapel Hill are aware that participation in local government can help improve those decisions, the same is true at the statewide level.”

And he says he will not credit any positive economic effects to the tax reform.

“If there’s a positive effect in our economy, following this tax reform package passing and following this budget passing, it won’t have anything to do with this,” said Kleinschmidt. “It will only be because the rest of us on the ground are working hard to create corrected policies and local support to correct for the problems that this budget and this tax reform package are making for North Carolinians.”

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