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NC Budget and Tax Center

North Carolina lawmakers are barking up the wrong tree when they claim that corporate tax cuts, such as those proposed in the state Senate, will spur job creation and economic growth. In reality, those tax cuts will do more harm than good, in both the short- and long-term.

Every dollar that Senate Bill 677 would give away in a tax cut has to be made up for with a tax increase on another business or individual or with cuts to schools, health care and other vital services that provide a strong foundation for our economy.

This tax plan would cost the state $344 million once the tax cuts were fully phased in, according to the Legislature’s Fiscal Research Division. Read More

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Last week was Sunshine Week, a national initiative to promote a dialogue about the importance of open government and freedom of information.

Today the sun seems to have gone into hiding here in Raleigh.

During House Education Week last month, Speaker Thom Tillis tapped several school superintendents to serve in “education working groups” with legislators, with the intent of seeking superintendents’ expertise and input on policies and legislation related to education reform.

Last week, the Winston-Salem Journal reported that lawmakers had already met informally in these education working groups to look at regulatory reform and identify state restrictions that can be eliminated to give schools more flexibility. Future meetings are said to include superintendents.

The word on the street is that there will be an education working group meeting of lawmakers and superintendents tomorrow, Tuesday March 19, 9am-noon in room 306B of the Legislative Office Building. Multiple calls to Speaker Tillis’ office, however, went unreturned when asked to confirm whether or not this meeting is open to the public. Calls to various lawmakers’ offices about this meeting went unreturned; however, one legislator’s office did confirm that the meeting will take place tomorrow.

The open meetings law states that “Whereas the public bodies that administer the legislative, policy-making, quasi-judicial, administrative, and advisory functions of North Carolina and its political subdivisions exist solely to conduct the people’s business, it is the public policy of North Carolina that the hearings, deliberations, and actions of these bodies be conducted openly.”

A public body is defined as: “any elected or appointed authority, board, commission, committee, council, or other body of the State, or of one or more counties, cities, school administrative units, constituent institutions of The University of North Carolina, or other political subdivisions or public corporations in the State that (i) is composed of two or more members and (ii) exercises or is authorized to exercise a legislative, policy-making, quasi-judicial, administrative, or advisory function.”

NC Policy Watch plans to try to attend the meeting tomorrow.

NC Budget and Tax Center

The safety and quality of life of communities across the North Carolina rely in part on investments in our judicial and public safety systems. Significant funding cuts to the Justice and Public Safety (JPS) budget in recent years have challenged various JPS agencies to take on more responsibilities with fewer resources. Since FY2009, net appropriations for the JPS budget have been cut by more than $218 million.

In recent years, cuts in funding to the JPS budget have also resulted in increases in court costs and fees. However, the Fiscal Research Division reports that court costs collections are down about 10 percent. The legislature closed four minimum custody programs in order to reduce costs in 2011. Furthermore, state funding has been completely cut for some divisions within JPS, which are now mandated to operate as fully-receipt funded operations. Read More

NC Budget and Tax Center

Twenty-three. This is the number of tax filers that were subject to the estate tax in North Carolina for tax year 2012 according to data from the NC Department of Revenue. The small number of taxpayers paying estate taxes doesn’t support claims made by proponents of eliminating the estate tax. Members of the House Finance committee recently voted to repeal the estate tax, with proponents claiming that the estate tax punishes those who have accumulated great wealth across North Carolina.

The estate tax only applies to the wealthiest individuals in the state and changes made to the estate tax as a part of the fiscal cliff deal will likely result in even fewer estates in North Carolina paying the tax. For 2013, the estate tax is only levied on the portion of an estate’s value that exceeds $5.25 million. In 2012, the tax year for which data is available, the threshold was $5.12 million.

Repealing the estate tax does not address any of the issues with the state’s upside-down tax system while providing beneficiaries of multi-million dollar estates a tax break. Furthermore, repealing the tax will reduce the availability of dollars for investment in the foundation of economic opportunity.

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The head of the Locke Foundation must have some Patrick O’Brian novels on his summer reading list this year. How else to explain today’s column in which readers are subjected to a lengthy and tortured series of seafaring analogies to explain the recently adjourned legislative session?

Not that we should object to the man finding some new way, any way, to spice up his column. Good lord, he writes a helluva lot of them — even if they usually are all variations on the same theme: Government and taxes – bad; The “market” – divine; Me – really, really smart.

One sentence in todays’ exercise in nautical nonsense, however, caught my eye as an especially absurd bucketful of rhetorical bilge water:

“According to Democrats and the Left, North Carolina was in shipshape condition and headed in the right direction before those dastardly Republicans took power.”  

How do you say “liar, liar, pants on fire” on a boat? Read More