House, Senate leaders working to hammer out tax deal

Posted June 18, 2013
Updated June 19, 2013

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— House and Senate lawmakers split off into a number of closed-door meetings Tuesday afternoon as they worked toward crafting a deal on a tax package. 

The Senate had been scheduled to give its final blessing to a deal that would have curtailed revenue growth by about $4 billion over the next four years by cutting income tax rates. Unlike others plans, including those put forward by the House and prior Senate proposals, it would not have extended the state sales tax, but it would potentially tax Social Security income.

However, immediately before the Senate was to debate the bill Tuesday, Senate President Pro Tem Phil Berger pulled it from consideration.

"We are talking with the House and the governor," Berger, R-Rockingham, told his colleagues. 

After session, Berger said that he was leading negotiations on the Senate's behalf. "We've been talking all along," he said.

He said that the latest version of the Senate bill, which takes some money away from local governments in order to balance the state's books, is the "Senate position" for the ongoing negotiations. 

However, Berger would not specify which aspects of the Senate plan were expendable and which ideas he would insist were in the final bill.

"It probably would be more productive if the specifics of those conversations remained between us, the House and the governor," he said. 

House Speaker Thom Tillis was more forthcoming, saying Tuesday evening that negotiations were active and ongoing. The plan the House sent the Senate did not change how Social Security is taxed. It extended sales taxes to some services that were associated with physical goods – such as warranties and deliveries – and lowered corporate and personal income tax rates. In many respects, it more closely mirrored early versions of Senate tax reform bills than the bill Berger is backing. 

Asked about the Senate provisions with regard to Social Security, Tillis said, "my caucus doesn't support it."

He said House Republicans were also concerned about parts of the Senate plan that rolled back the local sales tax and shifted utility tax revenue from local governments to the state.

Those changes would put "upward pressure on local property taxes" he said, adding that staff were still analyzing the potential impact. 

Tillis, R-Mecklenburg, said House budget-writers also worry about the Senate plan's impact on state spending. 

"We need to do it at a pace we can absorb and be sure of," he said. 

Both Tillis and Berger predicted a deal could be done this week.


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