On June 10, the North Carolina Association of Realtors announced a $10 million plan to "educate the public on key issues," including the awfulness of property transfer taxes. But it didn't seem to register with NCAR's 42,000 members until last week just how the association intended to pay for its bold campaign—with their dues.
Then, the blowback began.
"Extortion," thundered Bob Mulder, a Raleigh real estate agent. NCAR demanded that every member pay a special $50 dues "assessment" ($70 after Sept. 30) to fund the campaign, and plans to raise its '09 dues by $25. Members who refuse were told they'd be denied access to the group's MLS (multiple listing service) data, effectively putting them out of business. "I object to being strong-armed," Mulder said.
Another Raleigh member, Becky Harper, was one of several insurgents who wrote to the IRS questioning whether NCAR, a nonprofit trade group, can legally spend its members' dues for such "blatantly political purposes" as fighting transfer-tax referenda, as it's done recently—and successfully—in Orange, Chatham and 17 other counties.
Another dissident, Raleigh's Carlton Brown, who called himself "deeply offended by the arrogance" of association leaders, even started a blog (www.ncarnow.info) to rally opposition and stop the assessment. Brown said he doesn't object to NCAR's positions on the transfer tax and other issues. But he thinks the group should use its political action committee to solicit voluntary contributions from its members, not levy a mandatory fee. He, too, termed NCAR's position "extortion."
By Tuesday afternoon, Brown's blog had elicited 103 comments, almost all of them from fellow agents who agreed with his view. "Ask me, I'll give. Tax me, I will fight!" wrote Burlington agent Steve Moore.
Whether Brown's campaign is giving NCAR's leaders any second thoughts is unknown. Julie Woodson, NCAR's director of public affairs, didn't return our call.
NCAR President Wendell Bullard, however, shot back on Brown's blog, saying "It's easy to be on the sidelines throwing rocks at those with their backs turned to you because they are facing the issues that are impacting our business."
Bullard, a Durham agent, said NCAR's fight against the transfer taxes alone has cost the group $1.7 million, including more than $300,000 it spent fighting off the Orange County referendum in May.
In 2006, the General Assembly authorized all counties to collect a 0.4 percent tax on the sales price of commercial and residential properties, including raw land, but only if the county's voters approved. Since then, 19 counties have gone to the ballot, and all 19 have lost, with NCAR spending heavily to "educate" the public in opposition. NCAR says it's protecting property rights.
Harper, for one, disagrees with NCAR's stance. She sees the upshot of all the transfer-tax losses as higher property taxes in those counties. Prior to the '06 law, six counties were already collecting a transfer tax with General Assembly authorization, she notes, and in all six, property taxes are lower as a result.
"By spending this kind of money to defeat the transfer tax," Harper asked, "aren't we really saying to our buyers and sellers that we want their property taxes to go up?"
But Harper's fundamental objection to NCAR's campaign is that the staff and board of directors, now led by Bullard, have never polled the members on the transfer tax or other legislative issues. Most members are too busy with their jobs to pay attention to NCAR's lobbying, and most don't vote when board elections are held, she added. "The reality is, the majority of Realtors have no idea what NCAR is doing."
Harper said her member dues are $350 a year, not including the special assessment or the '09 increase. According to NCAR's Web site, $30 of each dues payment goes to the group's "issues mobilization fund," which supports its lobbying and campaign work.
Several dissidents said NCAR or their local association office has been telling them that the special dues assessment is fully tax-deductible as a business expense. However, according to Bob Hall, executive director of Democracy North Carolina and an expert in campaign-finance law, funds spent by trade associations for lobbying and public campaigns are not tax-deductible.
Also, it's unclear whether NCAR can obligate its members to support its campaigns against the transfer tax, Hall and other experts said. Hall said that if the MLS or other member benefits are publicly subsidized, it would curb NCAR's ability to make access to them contingent on contributions to an issues campaign.
The N.C. Realtors PAC has raised $335,000 in the first half of 2008, according to its State Board of Elections report, ahead of its '07 pace, when it raised $588,000. The PAC contributes to candidates' campaigns. It had $923,000 on hand as of June 30, and calls itself "consistently the No. 1 business PAC in the state."