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Statement on the Passage of the Income Tax Cap Proposal

The passage of Senate Bill 75, proposing a Constitutional amendment capping the income tax rate to lock in recent legislative decisions to reduce rates, is fiscally irresponsible and unnecessary.

In order to keep funding vital public services such as schools and public safety, lawmakers will likely have to raise the sales tax or fees, which will eat into middle class families’ paychecks and financially hurt those who are already struggling to get by.

Lawmakers are not trying to bring greater democracy to the budget process; they are trying to take choices away from future generations of North Carolinians.  Voters in November should reject this effort to limit the tools available to future policymakers and the will of future voters.

Constitutions should be flexible and enduring frameworks for governing, not the place to impose the arbitrary whims of the moment on future generations.

The vote shows just how arbitrary the rate is that legislators choose to enshrine in the state Constitution. The bottom line is that this is about further locking in low tax rates that primarily benefit the wealthy, cutting public investments that serve the common good, and shifting the costs for our state’s needs to local governments and the middle class.

In the end, the results of this unnecessary amendment will be costly for us all.

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The Week’s Top Five on NC Policy Watch

1. Democrats: Berger-Moore budget process may quash debate, amendments

When N.C. House Speaker Tim Moore and Senate President Pro Tem Phil Berger addressed reporters last week, they boasted that negotiations on the state’s estimated $24 billion budget were “far ahead” of years past.

According to top Democrats who spoke to Policy Watch this week, that may be because Republican lawmakers are considering a maneuver that would dramatically limit debate on the privately negotiated spending plan in the coming days.

State House Democratic Leader Darren Jackson says members of his party believe the GOP may pack the entire budget bill—negotiated by House and Senate leadership behind closed doors—into a conference committee report either late this week or early next week. While such a tactic is not unheard of at the General Assembly, this would be an unprecedented move with respect to the state budget according to several longtime lawmakers and legislative staffers.

Because a conference report is considered the final product of House and Senate negotiations on an already-filed bill, General Assembly procedures would provide only for a “yea” or “nay” v ote with no allowance for amendments.[Read more…]

Bonus read: Ten education policies to watch closely in the 2018 legislative session

2. Coincidence or collusion? NC Oil and Gas Commission receives curious requests to frack.

3. Legislators seek background checks, fingerprinting for election workers

4. NC officials order dozens of campaigns to forfeit illegal PAC contributions from pharma giant

5. One simple, moral and business-friendly step NC lawmakers could take to boost the economy

NC Budget and Tax Center, Uncategorized

Governor Cooper recognizes North Carolina is in a hole, stops digging

Governor Cooper released a proposed budget for 2018-19 that takes an important, though modest, first step in reversing the state’s failed tax cut experiment. The Governor proposed freezing corporate income tax rates at 3 percent rather than allowing them to drop again in January 2019, while also stopping personal income tax rate cuts on higher incomes.

Combined, this fiscally responsible approach will ensure $110 million is available in 2018-19 for public investments in areas that have immediate needs. Over the full Fiscal Year, the result will be an estimated $223 million in revenue available. Even more work will be required to undo the years of cuts that have been the priority of North Carolina’s General Assembly.

The hole we are in is deep.

This prudent first step in this year’s budget process demonstrates, however, what is possible when leaders put public investments before tax cuts. The Governor’s budget invests in a number of priorities in communities across the state, including increasing the number of school nurses and psychologists, funding classrooms, ensuring the Department of Environmental Quality gets the funding it needs to monitor air and water quality, and funding the transition of young people to the juvenile justice system under the Raise the Age proposal, among others.

There is no doubt that the damage of cutting tax cuts to our public institutions and communities has been years in the making and a more thorough adjustment from the tax-cutting approach will be required.

That should not diminish the importance of Governor Cooper’s recognition  that the first step when realizing you are in a hole is to stop digging.  Let’s hope the General Assembly follows suit.

Who pays? Read more

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As Congress grapples with how to reduce gun violence, a major gun retailer moves beyond “thoughts and prayers”

The Chairman and CEO of DICK’S Sporting Goods announced Wednesday the company has decided to no longer sell assault style rifles or firearms to anyone under 21 years of age. High capacity magazines will also no longer be sold by the national chain.

The company recently learned that it had legally sold a gun last November to 19-year-old Nikolas Cruz, though it was not the gun or the type of weapon used in the Parkland, Florida school shooting.

In a series of tweets the company announced its decision to pull all AR-15s and other semiautomatic rifles from its store shelves and websites.

‘We deeply believe that this country’s most precious gift is our children. They are our future. We must keep them safe.’

The sporting goods chain is also imploring elected officials to:

• Ban assault-style firearms
• Raise the minimum age to purchase firearms to 21
• Ban high capacity magazines and bump stocks
• Require universal background checks that include relevant mental health information and previous interactions with the law
• Ensure a complete universal database of those banned from buying firearms
• Close the private sale and gun show loophole that waives the necessity of background checks

DICK’S Sporting Goods operates more than 715 stores nationwide. You can read their full statement here.

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How NC’s Congressional delegation voted on the GOP’s sweeping tax-cut bill

Members of the U.S. House on Tuesday pushed through (227-203) the Republican’s sweeping plan to rewrite the nation’s tax laws.

The Institute on Taxation and Economic Policy (ITEP) says the final GOP-Trump tax bill would provide most of its benefits to high-income households and foreign investors while raising taxes on many low- and middle-income Americans.

Republicans claim the tax overhaul will spur economic growth.

Here’s how the full delegation voted:

Nay
Rep. G.K. Butterfield – 1st District
Rep. Walter Jones – 3rd District
Rep. David Price – 4th District
Rep. Alma Adams – 12th district

Yea
Rep. George Holding – 2nd District
Rep. Virginia Foxx – 5th District
Rep. Mark Walker – 6th District
Rep. David Rouzer – 7th District
Rep. Richard Hudson – 8th District
Rep. Robert Pittenger – 9th District
Rep. Patrick McHenry – 10th District
Rep. Mark Meadows – 11th District
Rep. Ted Budd – 13th District

What select members of the delegation are saying about the Tax Cuts & Jobs Act.

Congressman Walter Jones (NC-3):

Congressman David Price (NC-4):

Congresswoman Virginia Foxx (NC-5):

Congressman Richard Hudson (NC-8):

Congresswoman Alma S. Adams (NC-12):