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Legislature debates transit, broadband and cigarettes

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House approves half-cent sales tax for transit; Senate next

Mass transit in the Triangle took a major step forward last week with the passage of House Bill 148, which contains the local option for a half-cent sales tax for transit. The final vote was 70-45 and along party lines, with Democrats in favor and almost every Republican opposed.

The bill still must pass the Senate and be signed by Gov. Bev Perdue, who has indicated her support for it. But proponents considered House passage the tougher hurdle in the legislature, mainly because some progressive House Democrats disliked increasing a sales tax to pay for transit.

Rep. Jennifer Weiss, D-Wake, said in committee that voting for the bill "gives me heartburn" because, she noted, as important as improved transit is to the three Triangle counties, they don't need the legislature's authorization of a sales-tax hike to pay for it. The three could increase their property tax rates instead, Weiss noted, and the property tax payments would be deductible on federal tax returns.

Weiss and Rep. Paul Luebke, D-Durham, each a co-chair of the House Finance Committee, were key holdouts on the sales-tax measure, but both signed on when the corporate tenants in Research Triangle Park agreed to a "self-assessment" for transit of up to $4 million a year. Under the law that created RTP, companies there pay a property tax rate of just 10 cents (per $100 of value) unless they agree to more; HB 148 calls for that rate to double.

Luebke said the RTP assessment helps somewhat, but complained that corporations generally don't pay sales taxes while low-income folks are hit disproportionately hard with them. If Wake, Durham and Orange counties all enact the sales-tax hike, he said, they'll raise about $90 million a year for transit from a regressive tax that business—with the exception of RTP's $4 million—largely escapes.

Luebke's complaint, together with the argument about the federal income tax deducibility raised repeatedly by House Minority Leader Paul Stam, R-Wake, likely presages the debate when the bill moves to the county level.

Once enacted, HB 148 merely authorizes the three counties to seek voter approval of the half-cent sales tax at the polls. None of the three county boards of commissioners are expected to do so in 2009. Most of the bill's supporters want the three to act together, allowing for a Triangle-wide campaign for the tax increase in 2010.

Under a Stam-initiated amendment that the Democrats accepted, any referendum on the tax must be held at the time of a general election or primary election, not a random date chosen to limit turnout.

A coalition supporting the transit tax includes about 50 groups, such as the Carolina Asphalt Pavement Association and the Sierra Club, which are usually on opposite sides of legislation.

The tax would be used initially for bus improvements in the counties that approve it. With state and federal matching funds, tax revenues would also support construction of the Triangle's first commuter-rail lines, probably starting with pieces in each of the counties that would connect eventually to form a 56-mile service from Chapel Hill to Durham to Raleigh and Wake Forest. —Bob Geary

House lit up over smoking bill; Senate next

Now that the House has exhaled on the smoking bill, on Wednesday morning, the Senate Health Care Committee is scheduled to take up House Bill 2, which would prohibit smoking in most public buildings, including workplaces. (The meeting happened after press time; check back here for updates.)

The House passed the measure 72-45 earlier this month after five amendments and extended debate over private property rights versus the public health risks. The difference between the first and last editions of the bill is an expansion of the list of spots where smoking is allowed to include private vehicles, cigar bars, private clubs and public places such as nightclubs only if people under 18 aren't allowed to enter or work there.

Other exceptions to the ban include tobacco shops and cigar bars and facilities owned by tobacco dealers, processors or growers. Twenty percent of motel/ hotel rooms may also allow smoking.

There a few other exceptions, such as research centers studying smoking, but in general, if you're inside a public building or state-owned vehicle, you can't light up.

There is a $50 fine for refusing to comply with the law—equivalent to about a carton and a half of cigs.

As reported on the Indy's Triangulator blog, Rep. Jennifer Weiss, D-Wake, weighed in on the argument noting, "If you choose to allow smoking as an employer, you're choosing to impose a smoky work environment on your employees. What you're saying is 'You will work in this environment and you will breathe this smoke.' If you choose to do this, you need to choose to pay for health insurance for those folks because I as a taxpayer would choose not to pick up the tab for the costs of smoking in restaurants.

"We should give employees the same healthy environment we've given ourselves."

Smoking was banned in the legislature in 2003.

In the House, the only Triangle lawmaker to vote against the bill was Rep. Marilyn Avila, R-Wake.

Triangle membership on the Senate Health Care Committee is Bob Atwater, D-Chatham; Ellie Kinnaird, D-Orange; and Josh Stein, D-Wake. —Lisa Sorg

Broadbill would penalize cities

A fight continues on Jones Street over whether local governments should have the option to provide broadband Internet and other telecommunications services to their residents if the governments compete with private industry.

The bill's sponsors have dubbed it "level playing field" legislation, but opponents of House Bill 1252 call it the "deny broadband to North Carolina cities" bill. Last week, the bill passed the N.C. House Science and Technology committee, but it did so without a favorable recommendation.

Time Warner Cable and other cable TV companies say cities have an unfair advantage in that they don't pay taxes yet have access to cheaper financing. Industry is lobbying heavily for the bill, which would require local governments that offer Internet and other telecomm services to tack on to customer fees the difference in the amount it would cost a private company to provide the service. Also under the bill, a city could not use government funds to "cross-subsidize" the launch or operation of a system, a practice common in private industry.

Local governments across the state have voiced strong opposition to the bill. The N.C. League of Municipalities, the Raleigh City Council and the Chapel Hill Town Council have passed resolutions opposing it.

City representatives worry the bill will effectively prevent them from providing services to their residents—even when private companies don't find it profitable to upgrade systems to provide faster speeds or extend service to areas that don't have it. They also are concerned that the bill would prevent local governments from accessing the $4.7 billion of federal stimulus money designated to build infrastructure to improve broadband Internet access.

The issue has received national attention on technology blogs, including Slashdot and PCWorld, which point to an Independent story on the City of Wilson's $28-million fiber-optic Internet, TV and phone service, Greenlight (see "Mighty, mighty broadband," June 18, 2008.) Wilson offers significantly higher Internet speeds than Time Warner Cable at a lower cost.

The City of Salisbury, which has spent five years developing a system similar to Wilson's, has already borrowed millions to launch it. Its representatives fear the legislation would shut down their effort.

The bill's chief sponsor, Rep. Ty Harrell, D-Wake, introduced amendments to the legislation designed to exempt Salisbury, Wilson and any municipal service authorized before March 1, 2009. It clarifies that local governments should be eligible to use federal stimulus money and other public grants for municipal telecommunications services if they abide by the rules of the bill.

Opponents say those amendment don't go far enough, and they plan to keep fighting.

The bill goes next to the Public Utilities committee. A companion bill in the Senate, SB 1004, awaits hearing before the Commerce committee. —Fiona Morgan

For updates on these bills, see our Triangulator blog.

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