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Legislative agenda starts with tax reform, education policy

Published: 2013-01-26 16:00:00
Updated: 2013-01-29 09:15:17

The General Assembly has set out to remake the state's safety net programs for the poor and rewrite North Carolina's antiquated and exception-riddled tax code with one of the least experienced group of lawmakers in living memory. 

More than 100 of the 170 House and Senate members did not serve in state office just three years ago, marking the state's biggest legislative turnover since the 1970s. 

Many of these new faces are part of a Republican takeover of state government that swept away Democrats' century-long hold on power.  At its most ambitious, the Republican legislative agenda will alter everything from how the state takes care of its poorest citizens to how it regulates businesses. While there will be debate in each individual policy area, the GOP is really attempting a broader philosophical shift, observers say.

"It's a question of how we provide things we want and value," said John Quinterno, founder of South by North Strategies, a Chapel Hill company specializing in economic and social policy research.

Republican leaders say that the key to providing those things of value, such as public education and health insurance for the poor, is controlling costs and changing how taxpayers bankroll government.  

More Info     The State House of Representatives 2013 N.C. General Assembly Issue Tracker

Lawmakers held a one-day organizational session in early January to elect leaders and set their rules for the session. But the heavy lifting of legislating – drafting bills, crunching numbers on the state budget and negotiating compromises – begins Wednesday, when the session opens in earnest. There are no hard-and-fast rules that govern when lawmakers have to finish their work, although the current budget does expire June 30, but Republican leaders have signaled that they expect a fast-moving session that should end in May or June.

Those high hopes for a speedy conclusion seem reasonable now. Republicans have super-majorities in both the House and Senate, and after two years of laboring under a veto threat from Democratic Gov. Bev Perdue, they are working with Republican Gov. Pat McCrory. Both legislative leaders and the governor share an agenda that on its surface seems in sync.

For example, all agree that a remake of the state's tax code is in order. 

Tax reform agreements and disagreements 

"Everybody is talking about tax reform," Senate President Pro Tem Phil Berger said during a news conference with reporters earlier this month. "It's important for us because the current outline of our tax system is based on ... a 1930s economic model that is really not there. You've heard that from Republicans and Democrats over the years. We intend to move forward this time with a tax reform package."

For weeks, Sen. Bob Rucho, R-Mecklenburg, has been touting a plan that would eliminate the state's corporate and individual income taxes in exchange for raising the sales tax and applying it to more things. While that has been the most discussed plan, it has not been universally embraced, even by Republicans.

"There is no Republican proposal or plan," said Art Pope, McCrory's budget director. He said the outline Rucho is touting, which Berger backs, is only one of several options. Pope, who will advise the governor on what tax policy the state should pursue, said he worries that eliminating income taxes entirely could be bad for the state.

"To go there from where we are now is very difficult to do and has lots of impracticalities," Pope said. On the campaign trail, McCrory talked about the need to lower income taxes in order to be competitive with neighboring states, but he did not necessarily advocate for elimination of income taxes. 

It's also unclear how a House plan might look. 

"People always overestimate partisan conflict and underestimate institutional rivalry," said Ran Coble, executive director of the North Carolina Center for Public Policy Research. "There are still big differences between the House and Senate, and even the governor, even with those super-majorities."

As recently as 2008, Democrats held the executive mansion and both legislative chambers. Even with one party in control of most organs of state government – albeit with slimmer majorities than Republicans hold today – there were budget showdowns and public spats.

Both Berger and House Speaker Thom Tillis are said to be considering a run for the U.S. Senate seat now held by Democrat Kay Hagan. Neither legislative leader has directly said whether he will or won't run, but if both of them jump into the race, Coble said it would exacerbate the normal House-Senate rivalries. 

Some of those differences began to emerge last year. Tillis and House Republicans forcefully backed a plan to provide compensation to victims of North Carolina's eugenics program of the early to mid-20th century. The Senate refused to hear that bill. That was a small difference among many legislative accomplishments, but another sign that feuds are possible, even among lawmakers from the same party.

On the agenda

No list of pending legislative issues is likely to be complete. Lawmakers filed more than 2,000 bills during the past legislative session. Of those, 203 became law, with a handful of others passing as resolutions. However, there are some broad topics, such as tax reform, that are likely to come up and dominate the political news this spring.

Early in the session, legislative leaders in both chambers say they will pass a bill to require voters show identification when they go to the polls and to repay $2.4 billion borrowed from the federal government in order to pay unemployment claims. Along with McCrory, legislative leaders will have to decide whether North Carolina should run its own federal health care exchange under the Affordable Care Act and whether to expand the Medicaid program to cover up to 500,000 more people, as allowed by that federal law.

"There are major financial implications and human implications regarding this decision," McCrory told the North Carolina Association of County Commissioners on Friday. 

Lawmakers are also expected to push forward with changes to the state's education system. In particular, Berger said, the Senate would push plans to give schools more flexibility to hire and fire teachers and reward better performing teachers or those who take on tougher assignments. 

"You will see a renewed effort in that field," said Berger, R-Rockingham. 

Berger and others, including House Speaker Pro Tem Paul Stam, also said cutting back on regulations issued by state agencies would continue to be a legislative focus.

"I hope, by the end of the session, we'll have the craziest rules whacked down," said Stam, R-Wake.

He offered the regulation of those who braid hair for a living as one licensing standard that ought to be struck down. He said lawmakers make also try to loosen rules on food trucks. 

During his opening-day speech, Tillis, R-Mecklenburg, pointed to another possible area for action.

"We must protect our workers and their right to work, and we must send the very clear message to businesses already in North Carolina and those considering expanding here that North Carolina will continue to be the least unionized state in the nation," he said, garnering one of the biggest applause lines of the day.

North Carolina is already a right-to-work state by law, but Tillis said after his speech that it is possible lawmakers could push forward with a constitutional amendment.

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I hope every NC citizen starts paying "their fair share" of taxes.

Raleigh Rocks, apparently there was pent-up demand for that restaurant. The owner made the assumption, took that gamble and was rewarded by people who had money to spend. And while taxes play a role in every business strategy, they are not the driving force behind opening a business or hiring employees. Those decisions are based on the assumption that future and sometimes current demand will justify them. I speak as a small business owner for more than 25 years. You can cut my taxes to the bone...that won't make me hire more people if I can't meet or generate demand for our services.

Beachie said..Where does demand come from, primarily from the middle class, not the folks with money.You can have all the money in the world but if you do not need to hire anyone, your not going to.

When the taxes are low, and the economy has stability, those who have money want to MAKE MORE, so they will invest in business and begin to hire. If they feel their investment is not a good one IE I spend a dollar and Obama takes half of it, then they do not invest, and no jobs are created, no cash is spent, and Gov. does not get that 7% on the dollar since it was not spent.

New restaurant opened recently near me. No one I know was saying...we need a new restaurant around here(Demand was not there) but owner invested his money and opened it up. Now, its common to have hour waits for a table. The demand was created after he opened up, gave the consumer a quality product and service for a fair price.

Create an environment that encourages folks to start a business, which creates taxes

plenty...thats just bull man.

At the previously mentioned small high school, there are 40(Forty) teachers that are making over 50K a year....FORTY. Many of the these 40 teachers make far more than 50K. For of them Earn 63979.00 THOSE ARE THE INDISPUTABLE FACTS. According to your incorrect information, they all have over 32 years in WCPSS. So if all these 40 teachers were hired at age 22, they would be a minimum age of 54 years old. There are not 40 teachers over the age of 54 at this school. I love me some facts!

And I submit that WCPSS does not need as many positions as it has allotted for some areas.

Last comment for me, What creates jobs is demand for goods and services, not money. Companies give their money to their shareholders and their executives who often hold the companies shares. Companies will hire in a minute if demand for their goods or services creates the need. Where does demand come from, primarily from the middle class, not the folks with money. You can have all the money in the world but if you do not need to hire anyone, your not going to

And for my life, I am pretty darn happy with it. Life is too short to be otherwise

"Maybe that's why 1 in 8 teachers left the profession last year despite a relatively high unemployment rate in NC." - Plenty Coups

The line for out-of-state teachers coming into NC is long. Most are coming from union states where they can't find jobs.

Lets make it easier for the working poor, get Obama out of our lives so folks with money can create jobs.

Yep, life aint a bowl of cherries Beachie. Its tough out there. Our country says we guarantee Life, liberty, and the pursuit of happiness, not anything else.

I am sorry Raleigh Rocks I you are entitled to your opinion. I too have worked my but off, put myself through college, ate .27 boxes of mac and cheese when I was really really poor. But now, I am doing pretty well. Still work 2 jobs but hey that is just me. The elderely don't have alot of working choices you know. I know it is difficult for some to think about others, like those on fixed incomes, that are barely getting by now, really need to pay more for their groceries and medicine. What about the working poor that are working two jobs to try and make it, let's make it harder for them. How is that going to help anybody to just put people on the brink over it and on welfare? Oh I know they would could work 3 jobs and their kids can just run around unsupervised while they try to keep a roof over their head.

Raleigh rock-"No room to Cut?"

What exactly does your post prove? That schools don't need custodians, counselors, or secretaries? Even the "small ones" around 2000 students? It takes a NC teacher 32 years to even hit 50K in pay. Most college careers now start ABOVe that.

Maybe a sales tax, taxing consumption, will cut down on those on welfare wasting taxes given to them. Lottery tickets, cigarettes, drugs, alcohol........when food becomes more important than these evil things their lives might impove and they might decide to go back to school, get an education, and a better job...or a job.

Raleigh rock, those salaries are hardly excessive. In fact, they are pretty low compared with the rest of the country. You complain teachers aren't any good but you don't want to pay them anything. Why would a good teacher want to work here? You say spending more on education does not necessarily translate into good results. But cheaping out guarantees you poor results.

Beach mama..least position to pay it..Why? I busted my tail to make good grades, get an education, and get a job. There are folks black and white, who decided not to bust their tail, and played through high school and collage, called me names, yet now you say I should pay for their mistakes....Almost wants to make me not work and let others pay for me. AND ALAS, there is the reason why socialism will not work. Takes incentive away to be successful. You say they would pay more, I say they will start paying some, instead of none. The sales tax will capture all the drug money and under the table money that is rampant in our society now. Folks are making lots of untaxed income from drugs, tips,being paid cash to work ect. My point..if in America we are all supposed to be equal like the libs think, then why should we not all pay the same equal tax %???

I went to same schools with 2 African American friends of mine, K-collage. Opportunities for all have been available for over 40 years.

@plenty coups

my wife is a teacher in wake county. she wouldn't leave teaching because of the pay, i'm sure of that. she loves to teach. she would leave because of the environment in the schools that is created by the extreme lack of parenting we have in the community and how that effects the classroom.

conservatives don't hate public education, not as far as i can tell. what they don't like about public education, is the lack of responsiblity on the parents part that leads to extreme distraction in the classroom, and the irresponsibility of the community on free lunch programs etc. why throw money at a public system that those that could/should benefit from, abuse?

the same could be said of many public assistance programs btw. why continue supporting millions of the community if they spend it unwisely?

PlentyCommie says.....Per pupil spending in NC is far less than most other states so obviously its not true.

Additional funding does not always mean better education, so obviously that comment is not true.

One small high school in Wake with less than 2k students...

$52,040.88 Academy Coordinator $51,470.65 Career Development Coordinator $24,490.32 Clerical Assistant $17,877.10 Clerical Assistant $18,517.50 Clerical Assistant $19,978.00 Clerical Assistant $17,877.10 Clerical Assistant $57,965.20 Coordinator $78,090.00 Counselors $58,964.60 Counselors $53,829.48 Counselors $41,160.70 Counselors $44,709.75 Counselors $23,318.88 Custodian $29,155.80 Custodian $24,744.84 Custodian - Head $36,613.73 Intervention Coordinator $27,016.80 Registrar $51,999.55 SAP Coordinator $25,041.24 School Secretary - High School $54,335.25 Special Populations Coordinator $57,915.75 Teacher - Special Programs 43,000.00 10 Voc teachers

No room to Cut?

Raleigh Rocks 1

You are missing my point all together. All I was doing was throwing out an example to show why the sales tax is a regressive tax and hurts those that are in the least position to pay it especially on basic needs like food and medicine. I am fully aware, depending on how much the sales tax rate and base is as compared to the income tax, that some people may actually have more after tax money, primarily those that have more funds than is required to meet their basic bills. Those that live day to day and week to week, that have a low income tax rate may actually be paying more under the new system depending again on the rate and the base

"I don't quite get the point fo some posters that it's not fair to tax income, it's only fair to tax spending. Can they explain some hidden philosophical or moral argument for one form of tax over the other"

Their side proposed it so then they're for it. They convince themselves that its better that the poor and middle class should pay more as a percentage of income so that the long suffering rich can get another tax break. A reverse Robin Hood scenario.

Beach Mama...800 a month? 9,600 a year..really? What everyone forgets is you would bring home most of your gross pay..your money.

miseem, its not your money

I don't quite get the point fo some posters that it's not fair to tax income, it's only fair to tax spending. Can they explain some hidden philosophical or moral argument for one form of tax over the other, except that they would save more money using one rather than the other? It's widely accepted that someone making a higher income spends less as a portion of their income on expenses. The family making $200,000 may be buying steak and pay more tax on that steak than the family making $40,000, who may be lucky to buy hamburger. But at the end of the year, the wealthier family should still have a lot of income left over and these proposals would eliminate all state taxes on that. The lower income family would have virtually all of their income taxed when sales taxes are expanded. In addition, all of these articles report increasing the STATE sales tax to 8%, and including services. Counties also charge a 2% sales tax. Instead of figuring all of this at 8%, try 10%. On everything.

"Or you could move to one of those states instead of scolding us because teachers earn more there" But I'm not a teacher and I make good money, much more than my wife who is a darn good teacher and who does want to leave the profession. In fact, 15 of the 40 teachers at her school left last year. Two thirds of them have a second job. You should be scolded if you choose to ignore the facts. The replacements aren't as good of quality. YOU should care about this as Mississippi isn't something that we want to emulate.

wildpig-"nah thats not true-- 4 yrs under queen perdue no raise what so ever-- you wana rethink that?"

It is true. They admit it themselves. I'm no fan of Perdue's as she did freeze the pay initially, but she then DID propose raising state teacher pay the last 2 years when the economy improved and republicans voted her down both times.

"fact is teachers and state employees have tolerated a hostile gov ment in raliegh for 40 yrs and i'd urge every state employee an teacher to go on strike and cripple this state until parity is reached."

I agree with that.

Bunch of liars and hypocrites-the republican party. Oh they ran on proclaiming "we need to end tenure-to get rid of the bad teachers" but "we'll pay the good teachers more". Turns out its a baldfaced lie. They dropped the EOG test score bonuses for teachers and have no proposed plan to replace it. So either they didn't mean what they said or they were lying. They still want to end tenure-its a priority you see-but no talk of the other part. They're hypocrites because they spend big money on their priorities such as state workers who work for Pat McCrory or Thom Tillis as well as voter IDs, as well as tax cuts in a already overall below average taxed state.

Or you could move to one of those states instead of scolding us because teachers earn more there.

Republicans hate public education. Couldn't be more obvious. "Now is not the time to put money in education" really means we don't -- plenty

nah thats not true-- 4 yrs under queen perdue no raise what so ever-- you wana rethink that? fact is teachers and state employees have tolerated a hostile gov ment in raliegh for 40 yrs and i'd urge every state employee an teacher to go on strike and cripple this state until parity is reached.

Republicans hate public education. Couldn't be more obvious. "Now is not the time to put money in education" really means we don't ever want to pay for it and "We support paying only the good teachers more" means we don't want to pay for any good public school teachers as they've been saying that for decades and don't ever try to do it. Then there's the last argument, "We're broke". They already admitted this year that they are doing fine financially but they plan to cut taxes(again), in a already overall below average taxed state instead of paying the state workers who have had their pay frozen the last 5 years.

"There is plenty of waste in the system with excessive personnel in non teaching positions that if managed properly ..."

Been hearing this my entire life. Per pupil spending in NC is far less than most other states so obviouslyits not true. For it to be true, we would have to have high education spending AND teacher pay.

" could provide additional money for teachers without more revenue. But nobody has the ability or guts to make it happen."

I guess 5 years of cuts to education get ignored when it comes time to argue the point?

doingmybest-"and who determines "What they are worth"?

Hmmm. Perhaps teacher salaries in other states which average at least 10,000-15,000 more per year. Or perhaps we could look at other professions that require the same education level and see that teacher pay is 20-70,000 less.

>>"Right to work" does not prohibit unions. it simply allows workers to choose not to join a union rather than being forced to join if you want the job."

Not exactly. "Right to work" laws use Government regulations to directly prohibit groups of private citizens from forming legal agreements with private companies requiring membership in that group as a condition of employment. In states without "right to work" laws, private companies have the freedom to choose whether or not to sign a legal contract with a union. In "right to work" states, those types of contracts are illegal.

"A choice they both made that they either live with or do something about, other than continuing to parrot the same old same old."

Aaah, teachers should just accept it that their contracts were broken 5 years ago, right? I doubt any of them would be complaining that they picked the job, just give them what was promised when they started the profession. Don't break your word just because you belong to a political party that doesn't like public education.

doingmybest-"and who determines "What they are worth"? why do you have to spend more per student to pay teachers more?"

What teachers get paid here lags far behind other states and far behind other college graduates. Maybe that's why 1 in 8 teachers left the profession last year despite a relatively high unemployment rate in NC.

"The better question is, why are you OK with not paying them what they're worth? How do you justify this in your mind? Please explain." PC

and who determines "What they are worth"? why do you have to spend more per student to pay teachers more? There is plenty of waste in the system with excessive personnel in non teaching positions that if managed properly could provide additional money for teachers without more revenue. But nobody has the ability or guts to make it happen.

"Because he's married to a public school teacher."

A choice they both made that they either live with or do something about, other than continuing to parrot the same old same old.

Raising the sales tax will definitely impact consumption, which is, after all, the driver of our economy. If middle class and poor people have to pay a greater percentage of their income for food, they will necessarily have to buy less food as well as other commodities. This hurts businesses everywhere. Why do you think Art Pope is issuing cautions about raising the sales tax? It would directly impact the amount of money people could spend in his stores. Fewer sales, fewer jobs. This type of approach hurts our economy as much as it hurts the poor and middle class.

Morrigan-"Because he's married to a public school teacher."

The better question is, why are you OK with not paying them what they're worth? How do you justify this in your mind? Please explain.

"Right to work" does not prohibit unions. it simply allows workers to choose not to join a union rather than being forced to join if you want the job."

In the case of state workers, they are specifically prohibited from going on strike or collectively bargaining. I don't want to be forced to join a union but I also don't want to be prohibited from collectively bargaining. It's simply a mechanism in this day and age to take advantage of workers. Maybe that's why our teachers are paid near the worst in the nation and why many are leaving the profession.

"Right to work" does not prohibit unions. it simply allows workers to choose not to join a union rather than being forced to join if you want the job.

Another thing to consider. The rich have more wherewithal and tend to make more large purchases. Their large purchases, such as appliances, tend to be more expensive than po' folks' purchases. It is thus easier and more cost effective for them to go to a neighboring state to make large purchases. This is a great opportunity to avoid taxes for some.

The rich didn't get that way by paying a lot of taxes.

Who makes up the slack? Why the rest of us, of course.

A flat tax could work and it could be made fair so the poor are not disproportionately burdened. Simply exempt groceries and medicine. that is what you need to survive and should not be taxed. everything else is fair game. Many states use this model on sales tax. You want to buy $35 sneakers ay walmart you will pay less than If you want the $500 sneakers.

"You have in my mind, criminals that fraud the system, but do you take it away from law abiding citizens that need a little help and support?" beachmama

Yes. Right now it's a huge jobs program which means it's an empire for someone at state and federal levels. They have no incentive to weed out the criminals. Tell them to reduce the rolls instead of giving bonuses for signing up quotas of people into food stamps (Oregon) or they're out of a job in six months. They'll find the criminals. Or the street snitches will.

" But it does imply that those with less money will buy hamburger at the grocery store, while those that have more money will buy steak." beachmama

Do you have a problem with that? I don't. And I can't afford hamburger OR steak.

""Why are our schools funded amongst the worst in the nation?" PC

"Why do you insist on belaboring this point."

Because he's married to a public school teacher.

" This tax greatly impacts those making modest incomes" beachmama

And they probably get food stamps and other assistance. Just once, let's not refuse to do anything at all because "the poor" might suffer. This isn't mob rule, it's a republic.

Raleigh Rocks 1, Great Post!

I personally think the increase tax on food and other items to replace the personal state income tax is a GREAT idea! I think it is the very best way to ensure everyone gets to pay into the system.

Unions aren't bad. Why don't people realize that. There were some that made it terrible, but they help people, the possibility of a constitutional amendment is sickening and could actually lose the business of the entertainment industry that is now reblossoming in NC.

One other thing for those individuals that take itemized deductions on their federal tax return. You can take the greater of state income taxes or sales taxes as an itemized deduction. Good luck keeping up with all those sales tax receipts in order to get your itemized deduction

Raleigh Rocks 1....you are so right....well said!

Raleigh Rocks 1

I totally agree that there are people that abuse the system. I have seen it first hand and find it disgusting and shameful. However do you wipe out the entire system based on those that abuse it. If you really think about it, those folks that are against the assult weapon ban claim in part that criminals and mentally troubled persons are the problem, not law abiding gun owners. It is then claimed that you have to combat the underlying problem and bannin certain guns is not the answer. How is this any different? You have in my mind, criminals that fraud the system, but do you take it away from law abiding citizens that need a little help and support?

Raleigh Rocks 1

You with the internet today! Great post! Lets see how many times you get called racist before they they close this board down for the night! You know people are thinking it, so lets see if they'll say it!

Don't say More Money, Perdue keep saying we needed more Money, Well what happened to all the Money the Lotto was suppose to give. Where did it GO? We Need Trade Schools, The Illegals have taken up Most of the Buiding Trades that is out there. Teack Trades And maybe someone would be able to Start their own one day. We need to Start Checking on Businesses that Pay Under the Table. That means no STATE, FEDERAL, SS, Billion's of Dollars a Year . OBAMA needs to start Creating JOB'S and NOT GOV. JOB'S, It take 20 Workers to pay one GOV Worker who makes $75,000 a Year Plus benefits. Until WE THE AMERICAN pull together and stop the Two sides Pulling us apart we will never be that Great Nation again. Divide and Conquer. One side pulls us one way and the Other Pulls us the other way Just like a Rubber band Dems raise Taxes, Business raises Prices, GOP Lower tax's , Have you ever seen Business lower Prices?Both Ways they got us, WAKE UP AMERICA.

I don't agree with the idea of shifting the entire tax burden for folks purchasing food or getting services such as haircuts. I also don't agree with the idea of corporations paying nothing in taxes. What's next, not allowing lawsuits that incriminate corporations because it may affect jobs or potential numbers? I do think that the income tax and corporate tax should be lowered somewhat. Also, there should be a minimum income tax implemented, meaning even if you earn only social security, or disability payments, you pay something in return. However, exceptions could be made in certain cases provided that full documentation would be provided.

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