Chapel Hill, N.C. — Art Pope, who was named last month as Gov. Pat McCrory's budget chief, said Wednesday that a push by Senate Republicans to eliminate North Carolina's income tax is misguided.
Pope, who was speaking to journalists at the University of North Carolina at Chapel Hill, emphasized that he was speaking from his own perspective and wasn't conveying McCrory's official stance on any issue.
Legislative leaders want to replace the income tax with an increased sales tax rate that is applied to everything from groceries to car repairs, hair cuts and professional services.
A study by the left-leaning NC Budget and Tax Center said the wealthiest 20 percent of taxpayers would receive a significant tax cut, shifting the tax load to 60 percent of the state’s taxpayers, primarily middle-class and low-income households.
"A gross transaction tax, without any regard to whether you're actually making any money, not a tax on net income, I think that's going to hurt the economy," Pope said. "It is regressive in nature, no doubt about it."
The Budget and Tax Center also questioned the plan's ability to respond to changing economic conditions, such as when people cut back on spending, and noted that it would provide no additional money to invest in education or infrastructure.
Pope said next year's state budget will be very tight. A projected surplus of $800 million will be eaten up by rising costs for education and Medicaid, leaving no extra money for badly needed repairs.
"North Carolina's going to have to go through its budget – prioritize, modernize, innovate – to find money for needs," he said.
He didn't offer any specifics on McCrory's budget proposal, which is expected out within the next few weeks.
A former Republican lawmaker, Pope is a divisive political figure. He served for years as a leader of the conservative group Americans For Prosperity, and he and his family are major donors to Republican campaigns, conservative think tanks and third-party groups.
Democrats slammed his cabinet appointment as a political payoff – some are even calling him Gov. Pope – but he said he's unfairly targeted.
"They use me to personify their opposition to the Republican majority, to conservative policies," he said. "Rather than debate the merits of the difference in the policy, they've pursued, at times, a very vicious, malicious personal attack."
Still, Pope said, those attacks are nothing new, and they didn't stop him from accepting the post as state budget chief.
"I'm very proud to serve Gov. McCrory, and I appreciate the fact that he doesn't get dissuaded by what's said on blogs," he said.