Debate between the North Carolina Association of Realtors and an alliance of government and other interests over a proposed real estate transfer tax has evolved into a battle over tactics, who is spending more money lobbying on the issue, and where the money is coming from.
Both sides already have engaged state legislators and waged campaigns against one another through earned media, advertisements, newspaper opinion articles, and grassroots efforts.
At stake is whether state lawmakers — currently embroiled in budget negotiations — will decide to allow local governments to implement up to a 1 percent real estate tax on property transactions, pending approval from local voters. The option for cities and counties could be part of a deal in which the state would take the burden of Medicaid costs off the backs of county governments.
Proponents of the transfer tax, including statewide associations representing city officials and county commissioners, say the additional revenue is needed for school construction, road improvements, open land preservation, and clean water projects.
The North Carolina Home Builders Association and the N.C. Realtors are leading the opposition, saying it is a tax on homeowners who will lose hard-earned equity when they decide to sell their houses.
Yesterday featured the latest salvos from both sides. The day began with a full-page ad in the front section of The News & Observer of Raleigh, placed by the Partnership for North Carolina’s Future, a coalition of several special interest groups that support the transfer tax. The ad, in big bold letters, read “Your Vote Cancelled by the N.C. Association of Realtors and the N.C. Home Builders Association.”
The Partnership calls the alliance of N.C. Realtors and Home Builders “big-money special interest groups” who are “trying to intimidate” legislators into opposing the transfer tax. The Association of Realtors gave more than $600,000 to candidates last year, and according to a News & Observer report has spent more than a half-million dollars on lobbying and advertising.
The Partnership and its allies, including the North Carolina League of Municipalities and the N.C. Association of County Commissioners, have endeavored to keep that information at the fore about their opponents.
Yesterday the N.C. Realtors fought back on that tactic. After the morning’s newspaper advertisement, late in the day they released information about the lobbying expenditures of the Partnership for North Carolina’s Future and its members. According to the N.C. Realtors’ press release, 14 of the groups supporting the transfer tax collectively spent almost $1.1 million on lobbying and advocacy efforts during the first two quarters this year.
The list includes several professional organizations, but also six taxpayer-funded groups: the N.C. Association of County Commissioners; the N.C. League of Municipalities; the N.C. School Boards Association; the N.C. Association of School Administrators; the N.C. Rural Economic Development Center; and the N.C. Metropolitan Coalition. Those government-financed entities together spent more than $250,000 so far this year on lobbying, the Realtors said.
“North Carolinians should be disturbed to know that their local tax dollars are paying for lobbyists in Raleigh to walk the halls of the legislature asking lawmakers to enact a home tax,” said Tim Kent, executive vice president of the N.C. Association or Realtors, in the press release.
In addition, those associations of government officials are part of the coalition that forms the Partnership for North Carolina’s Future, which spent more than $400,000 on lobbying during the first two quarters.
“I think those numbers put all of this in perspective,” Kent said in a telephone interview. “The advocates of a transfer tax have spent more than a million dollars, and a good portion of that is tax dollars, so they can have another tax on the North Carolina public.”
But not all of those expenditures were for lobbying on the real estate tax.
“I can show you a list of 600 bills we are trying to follow,” said Ellis Hankins, president of the Partnership and executive director for the League of Municipalities. “A miniscule amount of time, effort and resources have been spent on the one issue the Realtors are fighting.”
Kent doubted the tax proponents are lagging in their efforts.
“[Hankins] has got nine lobbyists on staff,” Kent said. “They’re down there daily trying to advocate for a transfer tax.”
Editorial intern Joe Boylan contributed to this report.
Paul Chesser ([email protected]) is associate editor of Carolina Journal.