NC Budget Approved

2009 Update:

It seems a lot of people are looking for the 2009 NC Budget and are ending up at this post. The 2009-01 budget had been approved by the NC House and Senate 8/5/09 and was signed by Governor Beverly Perdue 8/7/09. The official text of the budget bill, Senate Bill 202, and the related Money Report are available at ncleg.net . A related technical corrections bill, House Bill 836, passed 8/7/09 makes modifications to Appropriations based on passage of SB 202.

2008 Update:

It seems a lot of people are looking for the 2008 NC Budget and are ending up at this post, so here is a direct link:
New - Bill Text - House Bill 2436, 2008-2009 State Budget, signed into law 3:52 pm, July 16, 2008 as SL 2008-107

At 4:24pm the NC House gave a final vote to approve the budget that includes Local Options
At 4:29pm the NC Senate gave its final vote to approve the budget that includes Local Options

There was some ritual debate in the House, none in the Senate. The bill now goes to Governor Mike Easley for signing into law.

Also of note, the NC Home Builders PAC took in $175,767.50 in the first half of 2007 and spent $38,206.54 leaving it with $409,242.08 cash on hand.

UPDATE: The Budget Bill was signed by the Governor on Tuesday July 31st. For the full bill go to:
House Bill 1473, State Budget, as enacted on 7/31/2007, S.L. 2007-323 (PDF Document 1171 KB)
or for financial synopsis:
The Joint Conference Committee Report on the Continuation, Expansion and Capital Budgets on House Bill 1473, July 27, 2007 (PDF Document 652 KB)

Local Option County Taxes

Language from Proposed Conference Committee Substitute H1473-PCCS30527-LRxf-4, The 2007 Appropriations Act. This is what it was all about:

LOCAL OPTION COUNTY TAXES
      SECTION 31.17.(a) Chapter 105 of the General Statutes is amended by adding a new Subchapter to read:
      "SUBCHAPTER X. LOCAL OPTION COUNTY TAXES.
            "Article 60.
            "Land Transfer Tax.
"§ 105-600. Short title.
   This Article is the County Land Transfer Tax Act.
"§ 105-601. Levy.
   (a) Authority. – If the majority of those voting in a referendum held pursuant to this Article vote for the levy of the tax, the board of county commissioners may, by resolution and after 10 days' public notice, levy a local land transfer tax on instruments conveying interests in real property located in the county, up to a rate of four-tenths percent (0.4%), in increments of one-tenth percent (0.1%).
   (b) Vote. – The board of county commissioners may direct the county board of elections to conduct an advisory referendum on the question of whether to levy a local land transfer tax in the county as provided in this Article. The election shall be held on a date jointly agreed upon by the board of county commissioners and the board of elections and shall be held in accordance with the procedures of G.S. 163-287.
   (c) Ballot Question. – The form of the question to be presented on a ballot for a special election concerning the levy of the tax authorized by this Article shall be:
            '[ ] FOR [ ] AGAINST
      Real property transfer tax at the rate of up to [X] percent [X%] of value or consideration.'
   (d) Resolution. – The board of county commissioners must, upon adoption of a resolution levying a tax under this Article, immediately deliver a certified copy of the resolution to the register of deeds of the county, accompanied by a certified statement from the county board of elections setting forth the results of the special election approving the tax in the county. Upon receipt of these documents, the register of deeds shall administer the tax in the county as provided in this Article.
   (e) Limitation. – A tax levied under this Article may not be in effect in a county at the same time as a tax levied under Article 46 of this Chapter.
"§ 105-602. Scope of tax.
   (a) Scope. – A tax levied under this Article does not apply to transfers exempt pursuant to G.S. 105-228.28 or G.S. 105-228.29 from the tax levied by Article 8E of this Chapter. The tax is in addition to the tax levied by Article 8E of this Chapter. A tax levied under this Article applies to transfers of interests in real property located within the county. If the property is located in two or more counties, a transfer of an interest in the property is taxable only by the county in which the greater part of the property, with respect to value, lies.
   (b) Basis and Effective Date. – A tax levied under this Article applies to the consideration or value, whichever is greater, of the interest conveyed, including the value of any lien or encumbrance remaining on the property at the time of conveyance.
The levy of the tax may become effective only on the first day of a calendar month set in the resolution levying the tax, which may not be earlier than the first day of the second succeeding calendar month after the date the resolution is adopted.
"§ 105-603. Administration and use.
   (a) Administration. – A tax levied under this Article is payable by the transferor of the interest. Except as otherwise provided in this Article, the provisions of G.S. 105-228.32 through G.S. 105-228.37 apply to a tax levied under this Article. The county must provide metering or similar equipment for the collection of the tax in lieu of the use of tax stamps.
   (b) Use. – The proceeds of a tax levied under this Article may be used for any lawful purpose.
"§ 105-604. Repeal or reduction.
   A county may, by resolution, repeal or reduce the rate of a tax levied under this Article. Repeal or reduction of the tax must become effective on the first day of a month and may not become effective until the end of the fiscal year in which the repeal or reduction resolution was adopted. Repeal of a land transfer tax, or reduction of its rate, under this Article does not affect a liability for a tax that attached before the effective date of the repeal or reduction, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal or reduction."
      SECTION 31.17.(b) Subchapter VIII of Chapter 105 of the General Statutes is amended by adding a new Article to read:
            "Article 46.
            "One-Quarter Cent (1/4¢) County Sales and Use Tax.
"§ 105-535. Short title.
   This Article is the One-Quarter Cent (1/4¢) County Sales and Use Tax Act.
"§ 105-536. Limitations.
   This Article applies only to counties that levy the first one-cent (1¢) sales and use tax under Article 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws, the first one-half cent (1/2¢) local sales and use tax under Article 40 of this Chapter, and the second one-half cent (1/2¢) local sales and use tax under Article 42 of this Chapter.
"§ 105-537. Levy.
   (a) Authority. – If the majority of those voting in a referendum held pursuant to this Article vote for the levy of the tax, the board of county commissioners may, by resolution and after 10 days' public notice, levy a local sales and use tax at a rate of one-quarter percent (0.25%).
   (b) Vote. – The board of county commissioners may direct the county board of elections to conduct an advisory referendum on the question of whether to levy a local sales and use tax in the county as provided in this Article. The election shall be held on a date jointly agreed upon by the board of county commissioners and the board of elections and shall be held in accordance with the procedures of G.S. 163-287.
   (c) Ballot Question. – The form of the question to be presented on a ballot for a special election concerning the levy of the tax authorized by this Article shall be:
            '[ ] FOR [ ] AGAINST
      Local sales and use tax at the rate of one-quarter percent (0.25%) in addition to all other State and local sales and use taxes.'
   (d) Limitation. – A tax levied under this Article may not be in effect in a county at the same time as a tax levied under Article 60 of this Chapter.
"§ 105-538. Administration of taxes.
   Except as provided in this Article, the adoption, levy, collection, administration, and repeal of these additional taxes must be in accordance with Article 39 of this Chapter. A tax levied under this Article does not apply to the sales price of food that is exempt from tax pursuant to G.S. 105-164.13B. The Secretary shall not divide the amount allocated to a county between the county and the municipalities within the county.
Notwithstanding the provisions of G.S. 105-467(c), during the 2008 calendar year a tax levied under this Article may become effective on the first day of any calendar quarter so long as the county gives the Secretary at least 60 days' advance notice of the new tax levy."

Update Saturday 2:09pm Budget passed 65-33 second reading in House, having passed second reading in Senate earlier.

Transfer Tax Still in Budget

The land transfer tax option is still in the North Carolina State Budget deal after House and Senate caucus meetings yesterday and despite the best attempts of the Realtor and Homebuilder lobbyists to derail it. The bill is currently being printed with an expectation that it will be read and voted on Saturday with a final vote in the early hours of Sunday. For updates check the Transfer Tax News feed over on the right. Mark Binker's Capital Beat and Laura Leslie's Isaac Hunter's Tavern have been producing the most timely after hours reports in their blogs which supplement their primary media, print and radio. Also check Under the Dome throughout the day.

Transfer Tax In Budget Deal

The Associated Press is reporting that the NC House and Senate have agreed on a state budget that includes a local transfer tax option. The story from WRAL which first reported it online:
NC Lawmakers Reach Tentative Deals on Spending, Taxes, Medicaid

Raleigh — House and Senate negotiators reached tentative agreements late Wednesday on a two-year budget that would make a "temporary" sales tax increase permanent and let counties raise additional taxes for school construction and infrastructure.

The deal, which requires final approval as part of the compromise spending plan presented to the full House and Senate, also would transfer the counties' share of Medicaid expenses to the state in a three-year phase out, House and Senate Democratic leaders said.

The two sides also agreed to give counties, with local voter approval, the right to raise either sales taxes by a quarter of a cent or the land transfer tax from 0.2 percent of the sales price to 0.6 percent.

The transfer tax was a major obstacle in the budget talks that began last month, as the North Carolina Association of Realtors spent nearly $600,000 this year on a public campaign opposing what it called the "NC Home Tax."

Several Senate Democrats have balked at the transfer tax option, but Senate Majority Leader Tony Rand expressed confidence Wednesday night that the proposal, as incorporated in the final budget bill, would pass his chamber.

"I believe that we'll be fine," said Rand, D-Cumberland.

UPDATE:
I just picked up the News & Observer from my driveway and the story did not get into print. Laura Leslie of WUNC was working even later on this story last night and has even more detail in her blog, Isaac Hunter's Tavern, even as she works on her morning radio: Wed. Late Edition: "Done Deal"?. The Greensboro News-Records's Mark Binker was also working late on this and has his updates: The tentative budget deal.

Ethics Shmethics

I swear I'm not making this up:

Code of Ethics Sets REALTORS® Apart
Here’s a general overview of just a few of the key principles REALTORS® willingly agree to under the Code:
· REALTORS® avoid practices, which may harm the public.
· REALTORS® do not exaggerate, misrepresent or conceal facts related to property or transactions.
· REALTORS® protect and promote their clients’ interests and treat all parties fairly.
· REALTORS® represent themselves truthfully in advertising and other public forums.

Here's what the NCAR Executive Vice President, said in a letter to the News & Observer:

After taxes and business/marketing expenses, Realtors had a net average income of $28,000.

Here's what NCAR put in its 2007 Media Kit:

NCAR Members Earn Higher Incomes
REALTORS® had a median household income of $102,330 in 2004 (last year data is available). That’s 132 percent greater than the typical American median household income of $44,389. REALTORS® median annual personal income in 2004 was $49,300. Almost one-quarter of REALTORS® had incomes that exceeded $100,000.

Would the REAL® REALTOR® income please stand up?

APFO, Moratorium, Impact Fee

Get ready to hear these terms more often if realtors' and homebuilders' efforts to defeat a transfer tax option are successful. The most immediate impact of success in their statewide campaign to sideline your vote on a local transfer tax option will be pressure to increase county property tax and sales tax. Whatever number of North Carolinians oppose a transfer tax, a large majority is bound to oppose increases in property or sales tax. This will leave homebuilders in the cross hairs for funding of schools and infrastructure associated with growth.

An APFO is an Adequate Public Facilities Ordinance, a growth management mechanism that can be locally enacted.

It is designed to prevent a community’s growth from outpacing the local government’s ability to provide necessary public facilities to serve that growth. It also can be used to channel growth into geographic areas (and school attendance zones) that are more capable of handling new development.
The primary APF criterion requires developers seeking project approval to show that currently available public facilities have adequate capacity to accommodate the project—or will have such capacity when the project is ready for occupancy.

Developers can make contributions to "speed up the adequacy". An APFO doesn't stop growth and doesn't slow it if developers are willing to step up to the plate for schools, water, sewer, jails, parks, fire stations and other public facilities.

A Moratorium is self explanatory. It stops a development activity in its tracks, until a community can get a handle on it. When a Moratorium is lifted a frenetic period of chaos can ensue as pent-up demand lets loose. APFOs help temper the frenzy. A Moratorium is a blunt instrument. Temporarily effective, but blunt and inefficient in the long run.

Impact Fees are a more direct way of tying new growth to community impacts:

Impact fees are payments required by local governments of new development for the purpose of providing new or expanded public capital facilities required to serve that development. The fees typically require cash payments in advance of the completion of development, are based on a methodology and calculation derived from the cost of the facility and the nature and size of the development, and are used to finance improvements offsite of, but to the benefit of the development.

The North Carolina public has shown more support for Impact Fees than Transfer Tax. As with transfer tax, the State Legislature must authorize the use of impact fees by local governments. Impact fees on an individual home would be substantially higher than any transfer tax amount but the benefits to developers can be more clearly demonstrated and linked, including job growth.

While impact fees often do not reflect the full price of infrastructure improvements, fees do make the economic linkage between those paying for and those receiving benefits more direct, and so promote economic efficiency. The obvious direct economic benefits include the actual infrastructure investment, such as new roads, new schools, and new water and sewer extensions. Indirect benefits include improved predictability in the marketplace, knowing when and where infrastructure investment will occur, and that all developers are treated equitably.

Desperate Housebuilders

Chris Fitzsimon of NC Policy Watch responds to a new Homebuilders ad attacking him. It seems the realtors and homebuilders don't know the difference between a state and a county. Of course they don't know the difference between 0.4 percent and 6.0 percent.

New levels of distortion

The realtors and homebuilders continue their attacks in the now desperate effort to deny people the right to vote on how to build schools in their own communities.

The latest attack comes as a radio commercial against this columnist by name, trying to use my past opposition to a statewide referendum on the lottery to somehow prove that my support for letting local communities vote on a transfer tax is inconsistent.

Tim Minton of the Homebuilders is the voice of the ad and says he wants to set the record straight. If only that were true.

Minton says that when I was debating the lottery two years ago I said “there is a strong argument that a referendum is unconstitutional and that government does not work by making budget decisions using referendums, even for tax hikes.”

Minton is right. I did say those things about a statewide lottery referendum. North Carolina is not an initiative and referendum state. Citizens cannot petition to put issues on a statewide ballot. John Sanders, the former director of the Institute of Government, has made a convincing argument that a statewide referendum is unconstitutional but the issue has never been decided by the courts.

Local referenda on the other hand have been authorized by the General Assembly and used several times by local governments. Mecklenburg County, for example, approved a half-cent sales tax increase to pay for mass transit funding in a county-wide vote in 1998. Unlike with statewide referenda, there is clear case law to support the ability of the General Assembly to authorize the local votes.

That’s not something Minton and the Homebuilders want you to think about. They’d rather attack me than talk about their misleading campaign to deny you the right to vote.

The rest of the ad says that I support referendums now because I want you to pay a real estate transfer tax that Minton says will cost you thousands of dollars when you sell home.

That’s not true either. What I want is the realtors and homebuilders to stop using their billions in profits to mislead us about their refusal to let the people in every county in North Carolina decide if the realtors and homebuilders ought to help pay for the growth that is bringing them their billions.

And let’s stop all the talk from the deniers of democracy about how much they are worried about the effect of a small transfer tax on the affordability of buying a home. The realtors six percent commission takes 15 times more from someone selling a house than the point 4 percent transfer tax proposed by the State House.

This isn’t about my position two years ago on the lottery or how that relates to how I feel about the transfer tax. Those positions are not inconsistent, but that’s not the point.

The bottom line is that the Homebuilders and the Realtors want to protect their billions in profits with their misleading media campaign, their well-connected lobbyists and their $880,000 in campaign contributions to state legislators.

We do have one thing in common. We are both consistent. I support allowing local governments to give voters the right to decide how to pay for schools and other infrastructure improvements. The Realtors and Homebuilders desperately want to deny you that right.

They simply can’t hide from that, no matter how much television and radio time they buy.

Weekend Wrap

Kirk Ross at Exile on Jones Street covers the great real estate collapse of 2007:
The 0.4 percent horror

I was just a kid when it happened, and I can’t imagine what it was like to experience it, let alone live through it. But driving through what is left of Cary, with its dark, crumbling cul-de-sacs and boarded up split-levels, you get a feel for the devastation of 2007.

Jack Betts laments the apparent lack of political will in Raleigh:
Legislators too busy bickering to address critical needs

RALEIGH --In a strange legislative session marked by inaction, delays and frustration, the most important debate has degenerated into a schoolyard shoving match over who's spending the most to inappropriately influence public policy.

Charlotte Observer thinks counties need relief and revenue options:
N.C. legislature should embrace a long-term funding fix

The governor is right. Counties need relief from Medicaid and local governments need revenue sources to finance local infrastructure and other services that will keep up with growth as it occurs. Legislators should make that a priority.

News & Observer observes Governor Mike Easley stepping up to the plate:
Easley dares lawmakers on tax

The governor challenges legislators to ignore opponents of a land transfer tax option and pass a $20 billion budget.
"I think that a lot of the legislators are scared of the Realtors and they've got to decide: Do they stand with the Realtors or do they stand with the people they represent?" Easley said.

WUNC's Laura Leslie at "Isaac Hunter's Tavern" has the Governor's audio:
Friday: Fits and starts

The Gov also reiterated his call to keep Medicaid reform within the budget bill, and said lawmakers opposed to the land transfer tax option are "scared of realtors."

Wilmington StarNewsOnline has a succinct editorial on the subject of transfer tax:
Which "home tax" will it be?

Now you know who most North Carolina state senators represent. It isn't property taxpayers.
If it were, a majority of the Honorables would let local voters decide whether to increase a tiny one-time tax on land sales to pay for the schools, sewers, water systems, law enforcement and other basic services that growth requires.

Fayetteville Observer supports a transfer tax option:
Voters should be able to choose how to pay for growth, conservation

We don’t buy the Realtors’ argument that a transfer tax will ruin home sales. A 1 percent maximum tax would add $1,000 to a $100,000 home. On a 7 percent, 30-year mortgage, that would add $6.65 a month to the payments — hardly a barrier to first-time buyers.
Six North Carolina counties already have a transfer tax, and it hasn’t caused a problem. It’s time to give every county that option.

WRAL has the full video of Governor Mike Easley's press conference:
Easley News Conference on School Money Allocation
Discussion of the transfer tax option begins about 10 minutes into the 17.5 minute video.

Wooden Pipes

Tim Boyum of News14 is carving a niche for himself in legislative reporting. He writes a blog Political Connections where Thursday he wrote about this issue of aging infrastructure in NC:

I talked at great length with Patrick Woodie over at the NC Rural Center. This is one of their headline issues and have done plenty of research on the need for water and sewer infrastructure. Anywho, he claims big water main breaks will continue. He also says there's a lot of concrete asbestos piping in this state as well.
  :::::
"Not too long ago, Asheville was replacing some pipe in the Woodfin area of Asheville and actually discovered wooden pipe still in the ground," Woodie said. "Hollowed out logs that were used for water pipe."

Blast Highlights Aging Infrastructure

An Associated Press story about this week's Manhattan explosion highlights the dangers of aging infrastructure. Just this Wednesday a large sinkhole caused by a 12-inch water main break in a Greensboro street swallowed a car and caused traffic headaches. Last week a sinkhole opened up in the middle of a Charlotte road. This follows another road closure in Charlotte the previous week due to a sinkhole caused by a water main break. While in June a parked SUV fell into a sinkhole in Shelby caused by a water main break.

It's a critical issue for North Carolina explored here: Report Paints Dark Picture of State's Infrastructure and here: Reality Check

Much of the state’s water and sewer systems date back 40 years or more and have exceeded useful life. Pipes of wood, cast iron and terra cotta have crumbled, and asbestos concrete used for water lines in the 1960s raises potential health concerns.

Get the report from Partnership for North Carolina's Future:
Reality Check
Read my previous coverage of the report issued by the North Carolina Section of the American Society of Engineers:
NC Infrastructure: C- Report Card
The North Carolina League Of Municipalities reviews why we cannot afford to let our infrastructure crumble:
Don't Let NC Crumble

Read the CNN story and see some video and photos of the infrastructure problem in New York this week:
N.Y. blast raises questions about aging infrastructure

NEW YORK (AP) -- With a blast that made skyscrapers tremble, an 83-year-old steam pipe sent a powerful message that the miles of tubes, wires and iron beneath New York and other U.S. cities are getting older and could become dangerously unstable.
:::::
From Boston to Los Angeles, a number of American cities are entering a middle age of sorts, and the infrastructure propping them up is showing signs of strain.
:::::
The American Society of Civil Engineers estimates that it will take $1.6 trillion over the next five years to get the nation's roads, bridges, dams, water systems and airports into good condition.

New York Times Slideshow  |  CNN Slideshow
It's a problem the North Carolina Association of Realtors wants to ignore. It's a problem for which the North Carolina Association of Realtors offers no real solutions. North Carolina needs local revenue options to meet the needs of aging infrastructure because local governments are charged with fixing these problems. The North Carolina Association of Realtors should step out of the way and let our counties and cities get on with the job.

Many Realtors recognize the need for infrastructure investment but the organization representing them is fighting reality and our Senate in particular. Just as there are sane Realtors there are real Senators. The State Senate needs to give our counties the tools to do the job properly. Senators need to pass a budget that includes an option for all North Carolina counties to vote on using a transfer tax to deal with these problems.

The Wilmington StarNewsOnline gets it with a succinct editorial on the subject of transfer tax today: Which "home tax" will it be?

Now you know who most North Carolina state senators represent. It isn't property taxpayers.

If it were, a majority of the Honorables would let local voters decide whether to increase a tiny one-time tax on land sales to pay for the schools, sewers, water systems, law enforcement and other basic services that growth requires.

Zero to 2.2 Million

Yesterday Brad Crone came out with a misleading statement on behalf of the realtors implying that every penny spent on lobbying by groups associated with the Partnership for North Carolina's Tomorrow was public money spent lobbying for a transfer tax. As Ellis Hankins of the North Carolina League of Municipalities explained, only a fraction of that amount was public lobbying dollars and was spent on many other issues as well including tracking of over 600 bills affecting NC local governments. Indeed the Partnership is addressing a wide range of issues and solutions.

Using the new realtor math we should add another $200,000 to the amount spent on lobbying by realtors and their allies to the $100,000 extra the realtors reported Monday. This would bring the running total up to about $860,000 spent lobbying against NC cities and counties. The NC Realtors PAC and 527 accounts add about $1.1 million to the war chest bringing the ammunition total up to $1.9 million. But wait, there's more. The Homebuilders PAC have yet to file 2007 reports but had $260,000 cash on hand Dec '06 and can be expected to add another $100,000 for the first half of 2007. So we're up to over $2.2 million in ammunition. This doesn't count the millions spent by Art Pope to maintain the supporting cast of propagandists and lobbyists from Civitas, John Locke, Americans for Prosperity and, Freedomworks who have all been busy churning out talking points, polls and action alerts opposed to a transfer tax option for local governments.

On June 27th the NC Association of Realtors added a third lobbyist to its stable of in-house lobbyists. Julie Woodson, formerly with the NC Pork Council, became the sixth person currently registered as lobbying on behalf of the NC Realtors, joining the five homebuilders lobbyists to make a soccer team of 11. Local governments have to come to Raleigh to beg the Legislature for permission to provide the services that the public expects them to deliver, services that realtors and homebuilders need to maintain their profitability. That requires lobbying on behalf of taxpayers. Local governments should not have to compete with corporate lobbyists with both hands tied behind their backs.

Need a Reality Check?

Amount spent by me on research, writing and video? $0.00

NC Wants to Vote on Transfer Tax

Press release from Public Policy Polling:

According to a recent survey conducted by Public Policy Polling (PPP),North Carolinians want the opportunity to vote on whether or not their county can use a transfer tax by a margin of nearly 10 to 1. The survey was commissioned by the Partnership for North Carolina’s Future.

Eighty four percent of those surveyed agreed that “voters in each North Carolina county should be able to vote on whether or not their counties can use a one time transfer tax to pay for communities needs…”, while only 8% were opposed.

“People want the same right to vote on the transfer tax that other counties have and they would be more likely (62-14) to vote for legislators who support giving them that vote,” said Dean Debnam, President of Public Policy Polling.

When given a choice of how to pay for schools, safe, clean water, better roads, open spaces and housing for seniors, those surveyed preferred a 1% transfer tax to a 10% property tax increase 75% to 25%. On average a 1% transfer tax would be equal to about a 10% property tax increase in most counties.

Survey respondents also favored (82%-18%) an impact fee charged to developers for each newly built home or business and a large majority (62%-38%) supported a tax on realtor commissions to help pay for community needs.

Additionally, 79% felt that realtors were being hypocritical by saying that a 1% transfer tax would prevent people from buying a home when those realtors charge a 6% commission.

In the last election the realtors and homebuilders made more than $900,000 in contributions to legislative candidates. According to the survey, 70% of likely North Carolina voters said they would be less likely to vote for legislators who received large contributions from realtors and homebuilders.

PPP surveyed 517 likely North Carolina voters on July 17. The survey has a margin of error of ± 4.3%. Other factors, such as refusal to be interviewed and weighting, may introduce additional error that is more difficult to quantify.

Complete results are attached and include crosstabs breaking down the results by gender, party affiliation, race, and age. If you have questions about this release or would like an interview regarding this release, please contact Dean Debnam at (888) 621-6988 or 919- 880-4888.

Complete results here  |  PPP Blog.

Croneyism

Like I said below, with friends like this who needs enemies? Look at the properties of a file in my mailbox. I have a PDF copy of Talking Points: Response to Partnership for NC’s Future.

Brad Crone's Campaign Connections has gotten over $100,000 this year from the NC Realtors. One of those talking points from Brad Crone who bills himself as a "Democratic political consultant"?

Our state does not have a revenue problem; it has a spending problem.

We've got a spending problem all right, a PAC spending problem. Like I said, with friends like this who needs enemies?

[Editor: This post is modified from the original post. Brad Crone is known to be a Democratic political consultant, not a party office holder]

In-Tim-idation

Most people write "Thank You" notes to express their gratitude. Tim Kent of the North Carolina Association of Realtors takes out 2/3 page ads in newspapers like this one for Dan Blue in "The Carolinian". Between the PAC ($750,000) the 527 ($350,000) and direct lobbying by NCAR ($500,000) when you've got $1.6 million to spend on legislators there are some things you just can't say with flowers, Hallmark or a horse's head.



With friend like this who needs enemies. We hear that legislators are afraid of opposition from the NC Realtors when they run for re-election. I say re-election to do what? Is there something more progressive they are planning on doing and just haven't gotten around to this session? Once you get inside the black limo your chances of returning to progressive politics are slim to non-existent. The time to act is now. Stand up to the PAC attack and support Local Options for Local Governments.

Realtor Population Explosion

In 2002 The North Carolina Association of Realtor (NCAR) reported over 26,000 members. That grew in 2005 to over 32,000 members, in 2006 to over 38,000 members and currently in 2007 a claimed membership of over 42,000. That is the equivalent of an annual growth rate of 10% per year since 2002 and a growth rate of 15% per year for the last two years. NCAR criticisms of the growth in public services due to population growth don’t seem to apply to their own organization.

That growth rate is faster than increases in population or economic growth in North Carolina. NCAR bemoans the modest take-home pay of individual realtors. It is becoming clearer that too many individual realtors are getting a smaller and smaller slice of the pie even as the pie has been growing. Home values have risen faster than consumer inflation as real estate commissions have remained steady. Homeowners are paying out more dollars now for the same transactions made 5 years ago even when adjusted for consumer inflation.

It is clear that the large sums of money involved in real estate transactions, where property values are rising, are attracting a lot of people to the business. Individual realtors may be seeing a decline in income because there is more competition. More competition has not led to a substantial lowering of cost for consumers because of NCAR’s strong hold on the market and, it seems, on legislators. NCAR now has a large base of nervous realtors ready to part with PAC money to shore up the monopolistic hold on the real estate business.

Update: For more on individual realtor income read our later post: Ethics Schmetics

Transfer Tax Trilogy

Dear State Senator | Support Transfer Tax | Local Options

Tick Tock

Monday is the due date for the NC Association of Realtors to file a "Principal Report" for lobbying expenses with the Secretary of State's Office. I'm expecting at least $100,000 in expenses for the month of June. NCAR has been moving money around between its various entities.

The NCAR 527 political committee, the antynomously named "North Carolina Homeowners Alliance" filed a mid-year report with the IRS this week claiming contributions of $380,162 since January 2007, all from NCAR, and total expenditures of $136,532. $71,034 of the expenditures was declared as a loan repayment to NCAR though the original $71,034 dated 8/10/2006 was never declared as a loan. The balance of $65,498 in campaign expenses brings the NCAR 2007 campaign total to $560,384.36 not including PAC expenses or direct payments to lobbyists.

Still waiting for the NC Realtors PAC to file updated data reports with the State Board of Elections for itemization of in-kind contributions totalling $127,600 presumably incurred for "Administrative Support" expenditures during 2005 and 2006. This week the PAC filed the 2007 mid-year report which shows a breakdown of 26 Administrative Support items totalling $61,029.90 mostly for "Employee Labor Cost" since January 2007.

Hey, guess what? Brad Paisley's coming to North Carolina. He'll be in Raleigh July 20 and Charlotte July 21 and he'll be checking you for Ticks:
Brad Paisley: Ticks

Dear State Senator

Dear State Senator

North Carolina has fallen behind in making the necessary capital investments in schools, transportation, water and sewer systems, and basic housing, as well as protecting farms, forests and natural areas. That failure to invest in the future is having a profound negative impact on North Carolina businesses and families.

North Carolina can’t build equity in homes, or expand and recruit business and jobs, with inadequate water and sewer services, poorly maintained roads, overcrowded schools and an unhealthy environment. With proper investments, North Carolina can build a strong economy and maintain a good quality of life. Please support local revenue options for North Carolina’s local goverments such as the proposed Land Transfer Tax or Sales Tax, subject to a vote of the people.

Please write or call your State Senator and please ask your State Representative to hold firm in State Budget negotiations for local government revenue options like the Land Transfer Tax. For more information check out the Partnership For North Carolina's Future and check out our earlier videos:

Support Transfer Tax | Local Governments Need Local Options

Reasonable Expectations

The NC Realtors PAC has submitted its 2007 mid-year finance report but has yet to file updated data files for 2005 and 2006. The newly submitted 2007 report shows $333,814.40 in contributions to the PAC including $61,029.90 in in-kind contributions representing 18% of contributions. Direct expenditures totalled only $13,178.42 leaving the PAC with $765,698.73 cash on hand.

State election law allows the parent entity of a PAC to provide "reasonable administrative support" without being included in contribution limits. (GS 163-278.19) However, there is no definition of "reasonable administrative support" so the practice is open to wide interpretation and, abuse. In any event, PAC rules require the filing of a CRO-1710 "Administrative Support Form" twice yearly to report these expenses but such forms have never been filed by the NC Realtors PAC.

Opposites

A POV article appeared last week in the Raleigh News & Observer. Written by Tim Minton, executive vice-president of the Home Builders Association of Wake County, it parroted the NC Realtors' opposition to an option to vote on a transfer tax. Mintons' group is spending $75,000 to air TV ads that point to the NC Realtors website. As if they needed help given the $500,000 they've spent this year so far. Stan Norwalk had an excellent op-ed the following day, "Another Reason We're Behind", on construction price inflation that Minton so conveniently ignored.

The homebuilders' opposition to a transfer tax option makes little sense in the current context. They have to know that failure of a transfer tax option will result in moratoria on housing development or more pressure to use Impact Fees and Adequate Public Facility Ordinances that will have an even greater impact on homebuilders costs than a transfer tax. The Minton article had a unique spin that was somewhat incoherent and spurred several people to write letters including myself. My op-ed opposition letter was printed Tuesday:

Tim Minton's July 5 Point of View piece against a 1 percent transfer tax has some hilarious contradictions and omissions.

Minton, executive vice president of the Home Builders Association of Raleigh-Wake County, claims his organization is opposed to real estate fees, but the Homebuilders never question Realtors' 6 percent commission. Spending $75,000 on TV ads to support the Realtors' $500,000 campaign proves where their allegiance lies (not with homeowners).

Minton claims sellers will pay the tax, but in the next paragraph claims that buyers will pay the tax. He claims some buyers will pay more in tax than a down payment. Buyers who barely afford a 1 percent down payment will struggle with subsequent costs of ownership. (And how can a first-time homebuyer be selling a house before owning one?)

Minton suggests it is a tax on residential property. It is a tax on all real property including land and commercial properties (whose revenues subsidize public services in new residential areas).

The transfer tax is less volatile than sales tax and generates revenue during economic growth when needed most for capital investments. Homebuilders' and Realtors' "nonsolution" would raise existing sales taxes and property taxes on all current residents including those on fixed incomes.

Other voices on the Letters page:

Selfish Motives | A Rotten System | The Profit Motive | Finding What's Fair | Pressure Points

Don't just take my word for it. The News & Observer had a editorial also: At The Closing

Despite intense pressure from Realtors and homebuilders, state legislators need to consider fairly a real estate transfer tax

Truth or Dare

According to a tip from the Outer Banks, the NC Association of Realtors has been desperately searching for the Lost Colony of Dare County realtors who may have been negatively affected by the Transfer Tax that has been successfully implemented in Dare County.

NCAR and, Wake County realtors in particular, have been bombarding their Dare County colleagues with requests to write letters saying the Transfer Tax has hurt their business. All of the realtors contacted by the source say the Transfer Tax has had no impact on their business.

Realtors PAC Fails To Itemize $127,600

The NC Realtors PAC, has failed to account for $127,600 in in-kind contributions that it did not report for two years. In March 2007 the NC Realtors PAC submitted revised summaries for 2005 and 2006 to the State Board of Elections but failed to submit revised data files itemizing the newly reported in-kind contributions made over the two year period. SBOE informed the PAC of this deficiency June 29th. As of writing the revised data files have not been posted at the SBOE website.

According to the SBOE, the parent entity of a PAC can make a reasonable in-kind contribution to a PAC for administration costs without it being considered a corporate or excess contribution. Without itemized reports it is impossible to determine whether the PAC is in compliance.

In addition, the PAC's data file for the first half of 2005 was never posted because the large file was caught in a spam filter. A review of other NC Realtor PAC files has uncovered some contributions to candidates that were either never reported by the candidate or reported without attribution. Without the full report it is impossible to cross reference. It's not just the NC Realtors. Another large PAC, the NC Medical Society State PAC, has no data on file for the 2006 1st quarter.

Because the SBOE concentrates its audit capacity on candidate reports before addressing PACs, the responsibility to flag non-compliant PACs falls to watchdogs like Democracy NC and more frequently blogs like BlueNC. Semi-annual reports for the first half of 2007 are due to be filed about a week from now. It will be up to you all to cast a wary eye on these reports to see who has been naughty and who has been nice.

Update: The SBOE notified the Medical Society today and loaded the missing data file to the SBOE database this afternoon. It should appear on the SBOE website tomorrow. Still waiting for the NC Realtors PAC files.

Tax, Lies and Real Estate

According to the Washington Daily News The NC Association of Realtors misled many county residents this week with letters and advertisements claiming that a public hearing was going to take place about the imposition of a transfer tax. No such hearing was scheduled and no such decision was on the table but many people showed up at a county commissioner's meeting Monday night anyway.

Of the seven North Carolina counties that have authority to impose a transfer tax, Washington County is the only one which has yet to exercise that authority. Commissioners did decide to hold a referendum in November to let people decide for themselves. The standing room only crowd on Monday night was clearly misinformed by the NC Realtors.

I had my own experience in Wake County. In May I wrote the following to the Raleigh Regional Association of Realtors and Triangle MLS because they were circulating a false statement:

Please stop telling lies about WakeUP Wake County, an organization that supports Fair Funding for Good Growth.
To assert in an email to your members and to County Commissioners that WakeUp Wake County is an "anti-growth, anti-real estate group" is patently false.
I call on the RRAR and Triangle MLS to apologize to WakeUP Wake County and issue a public retraction.

This is part of the response I got:

When you apologize for the U-Tube video, I'll apologize for the Anti-growth statement. Deal?

You mean this video?


Now the Wake Homebuilders have come out with a TV ad claiming "thousands in additional taxes" on a home sale. Thousands?

At the currently discussed rate of 0.4%, if the voters of a county decided to impose that tax on themselves, a tax bill of $2,000 would be the tax for a property with a $500,000 sale price. This is more than twice the median sale price for existing homes in North Carolina.

If 0.4% is "wrong", how is 6.0% Realtors' commission "right". How is paying a Realtor $30,000 for selling that $500,000 house going to "make sure our children can afford the American dream"?

Affordability is more than the numbers on a closing statement. The true cost of home ownership is greater and includes liability for public services like schools, sewer, water and emergency services. Maybe they're "selling" the "$500,000" house in the ad to move to a county that doesn't have trailers for classrooms.

Sopranos

The Washington Post wrote yesterday about Beverly Sills, the legendary soprano who passed away Monday:

She was the telegenic "diva next door," a friendly redhead from Brooklyn whose friends called her Bubbles; she was an aggressive Manhattan snob who never let it be forgotten that she did hold grudges. She was the warmest and most brilliant American coloratura soprano of her time; she was a high-culture power broker and adept political infighter. Those who knew her slightly liked her enormously; those who knew her better were sometimes a little afraid of her.

Sound familiar? Mark Binker thinks there’s a story about aggressive power brokers holding grudges but the screenplay is not ready for HBO:

There has been a persistent rumor/story going about the legislative building that the realtors have basically threatened legislators (or Senators ... depends on which version you hear) in swing districts with opposition in the next election if they back the tax.
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For my part, I've heard this from staff and legislators alike, but not from any legislator who says that they, personally, have been the subject of such a claim.
Could they have telegraphed that message and I've just not run into someone willing to talk about it? Sure. But I don't think that one is ready for prime time (or newsprint) yet

Laura Leslie is working on another version of the Soprano script:

I heard that story from an awful lot of House and Senate folks today. Some said they were approached, but wouldn't go on record about it for fear of retribution. Others said they believed the current rumors because they've been the targets of similar efforts in the past.
:::::
Granted, this kind of thing happens more often than you'd like to think. But you don't usually hear references to Tony Soprano. Most lobbyist efforts don't operate so overtly, or with so much such weight behind them.
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Several others admitted they were in fear of their political life after folks from the homebuilders and realtors assured them they'd be targeted in 2008 if they supported the option.

Oh to be a soprano! NC counties and municipalities must feel like the tenor in the Marx brothers “A Night at the Opera” in the middle of all this:

Driftwood: Well, I don't know... (muttering aside to himself) let's see, a thousand dollars a night... I'm entitled to a small profit... (to Fiorello) How about ten dollars a night?
Fiorello: Ten? Ten dolla- ha ha ha ha ha! I'll take it...
Driftwood: All right, but remember, I get 10% for negotiating the deal.
Fiorello: Yes, and I get 10% for being the manager. How much does that leave him?
Driftwood: That leaves him - uh, $8.00.
Fiorello: Eight dollars, huh? Well, he sends a five dollars home to his mother...
Driftwood: Well, that leaves him $3.00.
Fiorello: Can he live in New York on $3.00?
Driftwood: Like a prince. Of course he won't be able to eat, but he can live like a prince.

Apparently State Budget negotiators are still looking for the sanity clause.

For Sale, Under Contract, SOLD!

Posted with permission of John Cole. First published July 1st, 2007 at NC Policy Watch

UnReal

In a recent response to Chris Fitzsimon, the NC Association of Realtors' Tim Kent claimed that Realtor commissions averaged 5.1%. Actually that is a national average compiled by "REAL Trends" an industry group that collects voluntary self-reported information from real estate companies. In North Carolina that average is approximately 5.6%. Only a few metro areas actually report but the average in the Triangle is 5.4%, with Charlotte at 5.8%. Various factors supress the reporting of the typical 6% commission including new home sales, back-to-back sales and negotiated fees where a Realtor is buying and selling for the same client.

Even at the claimed 5.1% Realtors' take from a typical home sale has been increasing faster that the rate of inflation as home values have risen. Home owners are giving more money to Realtors in adjusted dollars even as the electronic age has Realtors doing less of the leg work.

Let Them Eat No Cake

And the claim of low average take home pay individual for Realtors? Studies that show that hot real estate markets attract more people to the business, making individual slices of the cake smaller. The homeowner is still paying for the whole growing cake which the NC Association of Realtors wants to have and eat. NC schools and local governments dealing with the effects of growth? Let them eat no cake.

Assets - Liabilities = Equity

The NC Realtors make a big deal about equity but never tell the whole story. In business, assets minus liabilities equals equity. Home equity is misleadingly described as home value minus mortgage debt and never includes all liabilities. The true cost of home ownership is greater than the numbers on a closing statement and include liability for public services like schools, sewer, water and emergency services. The NC Realtors are desparate to keep liabilities off the closing statement to promote a false sense of affordability, much like the sub-prime lending market has massaged loan documents to hide the true costs of home ownership.