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.

State Rep. Paul Stam

State Rep. Paul Stam

As noted in the post below, one of the myriad last minute additions to the state budget (i.e. the 400-plus page behemoth set to become law tomorrow) that was not present in either the House or Senate versions of the budget is a section added by anti-abortion crusaders to cut funding to Planned Parenthood.

This is a clear violation of House Rules. House Rule 44(b) specifically forbids the addition of such new, out-of-whole-cloth provisions unless the House refers the matter to a standing committee for review — something that is clearly not going to happen today.

What makes this all the more outrageous is that Rep. Stam — the man repeatedly identified in the News & Observer editorial cited below as the driving force behind the Planned Parenthood amendment — has a long history of raising hell on the House floor about… you guessed it…the addition of last minute provisions like this in violation of Rule 44.

In 2009, for instance, Stam took to the House floor (click here at go to 1:42 in the audio) to castigate the budget conference report for making tax changes not included in previous versions of the budget bill. He called the addition of the new provision a “blatant, flagrant and obvious violation of Rule 44(b).”

Stam’s only conceivable excuse in all this is that the current version of Rule 44(b) only applies to the addition of provisions dealing with “significant matters.” Perhaps in the twisted worldview of a person with a demonstrated, career-long indifference to women’s health, the act of harming thousands of women by making it much harder for Planned Parenthood to provide them with essential health care is not a “significant matter.” And given the low to which politics in the General Assembly have sunk in recent years, he’ll no doubt get away with it.

In the real world of words and laws that mean something, however, Stam’s position on this matter can only be described as blatant, flagrant and obvious hypocrisy.


As noted in this space last Friday, the rules of the North Carolina House of Representatives clearly require that lawmakers refer the conference report on the 2016-17 budget to a standing committee for review prior to the full House vote that is scheduled for tomorrow.

House Rule 44(b) states that:

“a conference committee report which includes significant matters that were not in difference between the houses, shall be referred to a standing committee for its recommendation before further action by the House.”

House Speaker Tim Moore

House Speaker Tim Moore

The obvious point of this rule is to prevent lawmakers from cooking up new law changes that were not included in either of the original versions of the bill passed by the House or the Senate and then inserting them in to a conference report that’s negotiated and drafted in secret. It is, in other words, a modest but important rule to assure a modicum of sunshine and transparency so that rank and file lawmakers, the news media and the public at large can have at least some idea of what the hell it is that’s being voted on.

Though everyone is still sifting through the massive 429 page document, here are two significant matters that are in the conference report that were not in either version of the budget passed previously:

#1 – As Chris Fitzsimon pointed out this morning, the conference report includes a new and hugely destructive provision to undermine light rail plans in the Triangle.

#2 – A new, out-of-whole-cloth change to state law on the number of so-called terminal groins that will be allowed along the coastline (see page 207 of the report).

These are both extremely important law changes that were never approved by either House throughout the eight month-long legislative session. Read More


Senate leaders repeatedly dismissed legitimate complaints from Democrats about the secret and rushed budget process during the floor debate Monday afternoon. Senate President Pro Tem Phil Berger said the hundreds of pages of special provisions were no big deal, that 99 percent of them had been discussed for three months or more.

That’s ridiculous of course. Many of the provisions were never discussed in open committees where the public and rank and file senators–who each represent just as many people as Berger—had an opportunity to weigh in.

This morning’s News & Observer reports on one secret provision stuffed into the massive budget bill that would deal what the story accurately described as a “crippling blow” to a planned light-rail line from Durham to Chapel Hill.

The prospect of a light-rail cap never came up when House and Senate leaders developed their separate budgets this year. The Republican-led legislature previously had clamped broader restrictions on funding for transit projects.

Even folks who misguidedly opposed mass transit can’t think we ought to make major transportation policy decision by secret budget provision.
It makes you wonder else has been secretly stuffed into the budget bill that legislative leaders are so determined to pass before everybody fully understands it.


Commentary, News

The state Senate convenes at 2:00pm Wednesday with the Republican-controlled chamber poised to give final approval to the proposed $21.7 billion state budget.

The Senate gave the 429-page spending plan initial approval Tuesday, despite appeals from Democrats to allow for more time to fully review the details of the two-year budget.

Senator Josh Stein told the chamber that even as the economy was showing signs of improvement, the  spending plan did little to restore the deep cuts made during the Great Recession:

“We are 42nd in the nation in what we pay our teachers. This bill does nothing to redress those deficiencies,” explained Stein.

“The budget spends $877 less in 2016-2017 per student, than the state did nine years before in ’07-’08 in real dollars. That’s nearly one thousand dollars less per kid next year, than we did nine years earlier.”

Stein noted that this budget also pays for 5,400 fewer Pre-K slots than the state budget passed before the Great Recession.

Senate President Phil Berger countered that this year’s budget will provide tax relief and shore up the state’s rainy day fund, bringing that total to more that one billion dollars.

The Senate is expected to give the budget its final approval today. The state House will cast its first vote on the spending package Thursday.

Click below to hear part of Tuesday’s debate:

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