In case you missed it, one of the weekend’s best editorials appeared in Saturday’s Greensboro News & Record. It blasted the General Assembly’s dreadful 11th hour addition to the already problematic bill to move next year’s primary election to March. A day after Chris Fitzsimon rightfully called the bill “what may be the most shocking piece of legislation passed in this General Assembly,” the N&R put it this way:

“It allows the creation of ‘affiliated party committees’ controlled by the speaker of the House, president pro tem of the Senate or House and Senate minority leaders. Bob Hall of the watchdog group Democracy North Carolina called them slush funds that could raise unlimited amounts of money from corporations or lobbyists, even during legislative sessions.

‘These changes take us backwards. They undercut the reforms adopted after the deal-making scandals involving House Speaker Jim Black a decade ago,’ Hall said in a news release Friday.

He should know. He and his organization initiated the complaints that led to federal corruption charges against Black, the Democratic speaker.

Hall added: ‘They give wealthy special interests new ways to dominate N.C. politics. And they create new ways for legislative leaders to sell access, steer money into their pet causes and exert control over other legislators.’”

The editorial concluded by calling on Gov. McCrory to veto the bill. And given that the measure only squeaked through the House by three votes, perhaps this once he’ll muster the courage. Click here to read the entire editorial.


The latest issue of the Justice Center’s Prosperity Watch is out and it explains some big practical problems that have become apparent in the new sales tax distribution changes that became law with the FY2016-17 state budget. As economist Patrick McHugh explains:

“The new allocation system does not target the states’ areas of most dire economic need. North Carolina divides counties up into three economic tiers, with Tier 1 being the most distressed and Tier 3 the most economically robust. As shown above, the forty Tier 1 counties receive roughly 1/3rd of the new allocation, while the majority goes to Tier 2 and 3 counties that are comparably better off. In fact, the average allotment received by Tier 2 counties is almost twice as large as what the average Tier 1 county will receive. While some struggling rural communities will get a bump in revenue, a more targeted mechanism or a direct appropriation made possible by an adequate state tax code could have sent even more to where it is needed the most.

There’s also concern about whether this new fund will come from new revenue, or will cannibalize existing sales tax collections. The bulk of the funds to be distributed according to this new system are projected to come from expanding the sales tax to a variety of repair and maintenance services, but it is next to impossible to accurately predict how much revenue will come from expanding the sales tax base in this way. If expanding the sales tax does not raised the projected revenue, this new fund could eat into the dollars distributed according to the existing formula or require greater appropriation of state dollars, resulting in a smaller net gain for counties that receive a part of this new fund.”

Add to this the fact that the changes were included in a budget that, as McHugh puts it, “will undermine state and local governments’ ability to build good schools and vibrant economies,” and you’ve got even more reason to be very worried about what lawmakers and Gov. McCrory have wrought with their duct-tape-and-baling-wire budget and tax package. The graph below illustrates the disconnect in the new law:


Anthony TataSunday’s big story in Raleigh’s News & Observer about former state Transportation Secretary Tony Tata and his personal troubles while serving in the military — which included being found to have committed adultery more than once in violation of military law and the discovery of a phony/forged court document filed on his behalf that was never explained  — came to public light less than two months after the former general’s sudden departure from state government.

What was unclear from the story was whether the uncovering of Tata’s troubled past had anything to do with his sudden departure. Usually, when a cabinet-level secretary departs his or her job, there’s more than one day’s notice. As noted here back in July, however:

“Yesterday’s sudden resignation was par for the course with Tata. Rather than announcing a plan for resignation and transition to new leadership of the massive department, he made the event all about himself by simply up and quitting in one day without, apparently, even saying good bye.”
Now, knowing what we know, it seems just as likely that Tata’s sudden resignation was brought about by either his (or the McCrory administration’s) dawning awareness that the story of his past was about to blow. The Governor ought to come completely clean with the public and let us know what was really going on and when.

You’d think Gov. Pat McCrory would be embarrassed to release a video recognizing state employees (see below) on the same day that the ink is drying on a new state budget that once more leaves them mostly out in the cold, but, alas, a capacity for being embarrassed does not appear to be a part of the Guv’s makeup. Here’s Chris Fitzsimon explaining the details in today’s Fitzsimon File:

“In a case of perfect timing, Governor Pat McCrory released a video Friday morning thanking state employees for their service to North Carolina and declaring next week State Employee Recognition Week.

Later in the morning McCrory signed a state budget that denies most state employees a raise, instead giving them a one-time $750 bonus that will not count toward their retirement.

The lack of a raise comes despite a state revenue surplus. Legislative leaders and McCrory decided to cut taxes again, primarily on corporations and the wealthy, instead of giving state workers even the modest two percent across the board pay increase the House budget originally proposed.

McCrory wants to recognize state employees—but not pay them very much.”

Back in May, McCrory said he wanted the state’s budget surplus to be used to give state employees a raise. Today, he signed a budget that does no such thing and dispensed the following virtual pat on the back in its place:

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Here’s the deal on the subject of expanding the sales tax base to include services as Gov. McCrory and the General Assembly have decided to do: It actually can be a good idea, but only if it’s paired with a plan to lower the overall sales tax rate and provide targeted tax cuts (like the Earned Income Tax Credit) to lower income people.

Unfortunately and remarkably, however, McCrory and state lawmakers are simply ignoring this simple truth and instead pairing the sales tax expansion with personal and corporate income tax cuts that overwhelmingly favor the wealthy. As Chris Fitzsimon pointed out this afternoon:

“Supporters of the new sales tax plan claim that it is not a tax increase, that it will be offset by a reduction in the personal income tax rate. But that’s not true for the folks at the bottom of the economic ladder who will receive very little, if anything, from the income tax cut.

Millionaires by the way will receive a $2,000 break and that’s on top of the windfall they received in the 2013 tax cut package.

Low income folks won’t be so lucky.

You might be wondering how this regressive tax scheme passed the General Assembly and what people said it about it as it made its way through the legislative process.

It never went through any committee. It appeared out of nowhere in the final budget agreement and questions about the formula and how to distribute the money in future years were not answered

Proposals to restore the state Earned Income Tax Credit to help low wage workers and their families that could offset a sales tax hike have also been repeatedly ignored.

There are plenty of reasons why the budget unveiled by House and Senate leaders this week takes North Carolina in the wrong direction.

One big one is that it raises taxes on people who can least afford to pay more.”

Meanwhile, that sound of crickets chirping? That’s the response to the new plan from the far right think tanks that have lectured us for years about the supposed evil of raising taxes in North Carolina. By all indications, they go along with the Governor’s bizarre take that raising taxes on people at the bottom is okay so long as the result is to reduce state revenue overall. Talk about your worst of all worlds outcomes.