Charlotte Overrides Veto, Moves Forward with Tax Hike

CHARLOTTE, N.C. --– The Charlotte City Council voted 8-3 Aug. 22 to override a veto from Charlotte Mayor Pat McCrorythat opposed pushing forward a 4% tax hike for rental cars as part of a proposed financial plan to pay for new museums and theaters.

The tax increase would cover more than half of the $150.5 million price tag of five new uptown buildings including a theater, a renovated science center, two art museums and an Afro-American Cultural Center.

Initially, there were three suggested tax revenues, according to council member Don Lochman. Surcharges on the city’s uptown parking and it’s special tax district were considered, but the council opted for the rental tax instead.

“We do think that the arts and sciences here in Charlotte draw tourists; draw people who will rent cars,” said Nancy Carter, a member of the city council, the arts and sciences council board and vice chair of the budget council committee.

Carter voted with the majority to move legislation forward that would allow for the tax, but Lochman, who voted against the tax, holds another view.

“For starters, half of that tax is exacted on Charlotte residents, not people visiting the city,” he said. “There’s a propensity for that (tax) to fall on people of lesser means.”

The current rental tax now sits at 11%. But if the 4% tax increase is approved by the state legislature next year, the new tax would bring in an extra $80.7 million for the project.

Both Lochman and Carter think approval is likely, due to the fact that other metropolitan areas - Greensboro and Raleigh - currently have a 15% rental tax.

And there is also the involvement of the nation’s fourth-largest bank to consider.

Charlotte-based Wachovia Corp. could potentially have $300 million in construction projects that would add $41 million in property taxes to the arts project. But Wachovia Corp.'s decision to expand construction from the current project relied heavily on the outcome of the vote. Without the arts project, the bank would only build $100 million worth of new buildings.

Though some council members had reservations about the car-rental tax proposal, they voted for the tax hike simply to keep the package alive.

“That’s one of the factors, yes,” Carter said, admitting that the Wachovia project was incentive to get the tax through. “We’re increasing the tax base.”

Lochman, however, stands by his argument and reminds that “they’re (Wachovia) not putting in additional condominiums and retail to be nice people. I think is a grotesque misuse of tax-increment financing.”

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