News: CJ Exclusives

Caution Urged on Constitution Changes

Tax-increment financing amendment has been rejected twice before

Robert Orr, executive director of the newly established North Carolina Institute for Constitutional Law, told the Asheville Board of Realtors last week to proceed cautiously in considering whether to support proposed changes to the state constitution.

Orr, who retired recently as a N.C. Supreme Court justice, urged the audience to pay close attention to Amendment One on the November ballot. The proposed amendment would grant local governments authority to issue bonds to pay for public improvements associated with private development projects, with the bonds to be financed by taxes on higher property values within a designated district around the projects. Voters have rejected similar proposed constitutional amendments for the practice, called tax-increment financing, twice before.

“The Constitution of North Carolina is a limitation of powers of the General Assembly,” Orr said, “and this amendment removes a part of those limits.” Amendment One would allow local governments to issue the tax-increment bonds to incur debt without a referendum by voters, as is now required under the N.C. Constitution.

“Since 1868 our constitution has given the voters the final approval of deciding whether debts for projects such as the ones proposed should be incurred. If the amendment passes, then elected officials will be able to issue bonds benefiting private development projects, without seeking the approval of the voters in the affected areas,” Orr said.

Orr noted that it was not the NCICL’s role to urge passage or defeat of the amendment, but instead to generate awareness about the question and the impact of amending the state constitution. “It concerns me,” Orr said, “that neither the proposed amendment nor the abbreviated summary which will appear on the November ballot, clearly states that the current constitutional requirement of a vote by the people will be changed. Our concern is that the potential change will not be clearly understood by the voters.”