Op-ed: NC lawmakers benefit from a questionable tax dodge

Be sure to check out veteran journalist Seth Effron’s on-the-mark op-ed on WRAL.com this morning, “An honest wage or tax dodge for N.C. legislators?”

As Effron explains, a large number of North Carolina legislators are making use of a highly questionable tactic that allows them to supplement the state’s puny and inadequate legislative salary.

Here’s an excerpt:

While rank-and-file legislators’ “salary” is $13,951 by state law, they also collect a $104-a-day expense allowance when the legislature is in session; a monthly $559 expense allowance along with a travel reimbursement for a weekly trip to and from Raleigh.

That mileage allowance alone, based on the reimbursement rate, for one legislator traveling to Raleigh from the far western reaches of the state is around $36,600 for the 52 weeks the legislature was in session last year.

For many rank-and-file legislators the true income for the session exceeded $60,000 – with as much as 80% tax-free — no questions asked — because it is technically reimbursement for expenses. Many legislators don’t spend a penny of that money for their expenses. State campaign finance laws let them pay for their in-session travel, housing, food, childcare and even clothing.

What’s more, as Effron goes on to explain, not all lawmakers enjoy the opportunity to make use of this tactic:

But not every legislator qualified for this tax-free bonanza. Legislators – regardless of political affiliation — who live within a certain radius of Raleigh (essentially the Triangle area) have been reminded in recent days that federal and state law doesn’t grant them the same benefit.

Not only do they pay taxes on their legislative salary – they also pay taxes on the per-diem and monthly expense allowance. They are not permitted to get ANY reimbursement for travel.

So, even though state law says the state Senate majority and minority leaders get the same pay, monthly expenses and per diem – Senate Majority Leader Kathy Harrington from Gaston County collects $67,650 and 75% of it is tax free. Meanwhile Senate Minority Leader Dan Blue of Raleigh pays taxes on all of the $61,650 he collects – and doesn’t get a dime for any commuting.

Effron then goes on to highlight some other questionable (and quite arguably unfair) aspects of the way state lawmakers are compensated — including the fact that they receive per-diem reimbursements seven days a week…

“…even though the General Assembly usually has only a perfunctory session on Monday evenings and rarely meets on Fridays.

Not only that, but at a majority of the sessions of the House and Senate last year there was no recorded business.

The bottom line: As Effron’s essay makes clear, North Carolina should pay lawmakers a truly adequate and taxable salary and ditch the crazy and convoluted expense reimbursement system.

Click here to explore the entire op-ed.

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    Op-ed: NC lawmakers benefit from a questionable tax dodge

    Be sure to check out veteran journalist Seth Effron’s on-the-mark op-ed on WRAL.com this morning, “An honest wage or tax dodge ...
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Op-ed: NC lawmakers benefit from a questionable tax dodge