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Constitutional amendments delayed after change

Posted August 10, 2015

— Senate leaders decided to postpone until Tuesday a vote on budget-related constitutional amendments after making a major revision to the bill Monday night.

Senate Bill 607 would make three changes to the state constitution: It would cap the state's individual and corporate income tax rate at 5 percent, would require a rainy-day fund for a crisis that couldn't be spent without a two-thirds vote of the legislature and would cap annual state spending at no more than estimated population growth plus inflation, a limit often known as the "Taxpayer Bill of Rights," or TABOR.

Monday night, sponsor Sen. Brent Jackson, R-Sampson, unveiled an amendment to the bill that would make two major changes to it.

First, it would add a dollar amount requirement for contributions to the constitutional rainy-day fund. Beginning in 2016, the legislature would be required each year to deposit an amount in the fund equal to 2 percent of the prior year's appropriated budget. In 2016, that would be around $420 million.

Those 2 percent annual deposits would continue until the fund reaches 12.5 percent of the budget, or around $2.6 billion.

The second major change would combine all three of the proposed constitutional amendments into a single ballot question. Voters couldn't vote for one proposal and against another. They would have to vote to approve all three or none.

Jackson said the three together are an "integrated" tax strategy that "will strengthen the fiscal integrity of the state and protect the taxpayers from government overreach."

But Democrats criticized the move.

"If a citizen was to conclude that having a rainy-day fund makes a lot of sense but having the spending cap makes no sense at all," said Sen. Josh Stein, D-Wake, "as a voter, you’re denying them the right to choose the rainy-day fund but not the other two."

"I don’t know that we’re denying the voters anything," Jackson replied. "Basically, what we felt like, these three went together like a glove."

Democrats also sharply criticized Republicans' insistence that Jackson's amendment be voted on Monday night, even though the bill itself was postponed till Tuesday, arguing the amendment needs more review and debate.

"I don’t think amending the state constitution should be done on the fly," Stein argued. "It is disrespectful of the importance of that document. It’s disrespectful to the people of North Carolina. I don’t know if it’s a good idea or not, but I’m voting no."

"This is a $2.6 billion appropriations bill, and we’re going to vote on it having spent less than half an hour addressing it?" added Sen. Jeff Jackson, D-Mecklenburg. "That is not prudent. That is not fair to the taxpayers of our state."

State Treasurer Janet Cowell warned lawmakers in a letter Friday that the package of amendments could endanger the state's financial stability and its credit rating. When asked, Brent Jackson said he had not sought feedback from rating bureaus or bonding experts on either the proposal itself or on the details of his amendment, such as the 12.5 percent rainy-day cap, a number he said he chose because "I think we can get [it] passed."

"We tried to pick a medium number we thought this body could agree on and the body across the hall could agree on as well," he said.

Brent Jackson concluded by reminding his colleagues that the voters, not the legislature, will make the final call on the proposal in 2016.

"That voter out there in the countryside – that poor ideological fool that we sometimes think them to be – we’re going to allow them the opportunity to make that decision for us," he said, "those people that are paying the taxes, that are working every day."

The amendment passed on party lines.

6 Comments

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  • Nathaniel Grubbs Aug 11, 2015
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    I certainly remember. I also remember that they moved it to the primary because they were accused of trying to sway other votes towards Republicans by drawing the anti-gay crowd. I also know that education was an issue. Those pushing the amendment only had to claim that they were "protecting families" and let ignorance and bigotry sway voters. It was up to those opposed to the amendment to educate the public on the harms. The amendment would likely have still passed in the general election; placing it on the primary ballot was salt in the wound. Similarly, those opposing these tax-and-budget amendments will have their work cut out for them to educate the public on why they are bad ideas, even without such scheduling tricks.

  • Jay Tanenbaum Aug 11, 2015
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    I would hope not but this GA isn't above that. Remember Amendment #1? That was done on a primary ballot.

  • Nathaniel Grubbs Aug 11, 2015
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    Unfortunately, Jay, I doubt they have to resort to such trickery. It will be easy enough to convince the general populace that they are voting to permanently keep those evil taxes low, then trust that people won't dig deep enough to know the whole story. It will be those opposed to these measures that have to put in all the work to educate the public.

  • Jay Tanenbaum Aug 11, 2015
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    What you will see them do is put this on a ballot during a primary, especially since the Republican field has so many in it right now. This way, many folks won't vote and they can pass it through.

  • Nathaniel Grubbs Aug 11, 2015
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    Just like politicians who know their ideas are bad to bundle them with decent ideas to trick people into approving them. Capping taxes and budgets will deny future law makers the flexibility they need to respond to a chronic crisis. Moreover, the cavalier attitude of "We aren't really voting for it, the people are" is a recipe for trouble. You have been elected by the people to make difficult decisions; the buck stops with you. If this is approved and it destroys this state, it is the legislators who voted for it, not the people, who are the ones who will be responsible.

  • Jay Tanenbaum Aug 11, 2015
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    As shown in Colorado, as well intentioned as a TABOR is, it doesn't work that well in reality. They actually had to suspend it back in 2005 due to lack of services for the state. And there is a good reason why no other state has tried to adopt it.

    Race to the bottom here we come.