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NC Budget and Tax Center

According to documents made available to the media, we have details of one of what could be multiple tax proposals that the Governor’s office is putting into the mix as the House and Senate leadership negotiate a final tax plan.   

While the Governor has clearly continued to prioritize revenue neutrality – an important pursuit in these times – and gets much closer than any of the other plans, his proposal “Alternative 3A” still falls short. Overall, the governor’s tax plan would reduce annual revenue available for public investments by around $215 million upon full implementation, which is less than annual revenue lost from the House ($500 million annually) and Senate ($1.3 billion annual) plans. Read More

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It looks like Governor McCrory’s role in the big tax cut debate between House and Senate leaders might be merely to market what the legislative leaders come up with.

Here’s what House Speaker Thom Tillis told the News & Observer about McCrory’s role in the discussion about a tax deal.

We need the governor fully on board so he can communicate it and get people to understand it.

That’s a bit of an odd take from Tillis. He didn’t say they need to work with the governor because he is running the state or because he is the top elected official of their own political party or heaven forbid, because he might have some policy ideas and strongly held views of his own about taxes.

No, they need the governor on board only to sell the package that Berger and Tillis decide on. It is pretty clear legislative leaders believe they are in charge in Raleigh these days. McCrory? He is their PR guy.

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From his inaugural State of the State speech to interviews just a few weeks ago, NC Governor Pat McCrory has repeatedly proclaimed the critical importance of any tax reform in North Carolina being “revenue neutral.”  Indeed, in the State of the State speech he emphasized the need to protect NC’s vital services – like health care – in any reform.  McCrory is now presented with tax reform plans from the NC House and Senate that far from being “revenue neutral” cut literally billions of dollars from NC’s state budget over the next few years.  How will he react to this challenge to one of his bedrock principles on tax reform?

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In case you missed it, the Fayetteville Observer had this to say over the weekend about the issue of recent campaign contributions from corrupt gambling interests to Gov. McCrory, Senate President Pro Tem Berger, Speaker Tillis and others:

“It’s clear that campaign-finance reforms haven’t gone far enough. The laws may be better, but enforcement is weak.

The Board of Elections needs to conduct a full, unbiased and public investigation that follows the money wherever it goes.

And the General Assembly needs to follow up by giving state regulators the tools they need to spot illegal campaign contributions quickly.”

Read the entire editorial by clicking here.

NC Budget and Tax Center

As local school boards begin to plan K-12 budgets for the coming school year, they continue to feel the squeeze from a still-fragile economy and continued cuts in state support for public education. Since FY2009, state support for K-12 education has been cut by more than $1.3 billion and Governor McCrory’s proposed budget for FY2014 continues this trend with $85 million in cuts to K-12 education.

The budgeting environment will likely be even more challenging for the upcoming school year with the expiration of one-time federal funding. North Carolina received $297 million in federal dollars for K-12 education (“Ed Jobs” funding) as part of the American Recovery and Reinvestment Act approved by Congress in 2010. All local school systems received Ed Jobs funding, which was used to retain existing employees, recall or rehire former employees and to hire new employees. Local school systems were required to spend all Ed Jobs funds by October 2012 and no additional funding will be available for the upcoming school year. Read More