Today @NCCapitol (June 7): House lawmakers meeting Friday to tackle budget and taxes

Posted June 7, 2013

— Good morning and welcome to Today @NCCapitol for Friday, June 7. This is WRAL's roundup of what you need to know about North Carolina state government today.

EXTRA INNINGS: House lawmakers have stayed in town for an unusual Friday full of committee meetings and floor action today. Leaders say the extra day will let them keep the budget on schedule and move through bills in anticipation of adjournment. 

FIRST UP: The six main budget subcommittees – Transportation, General Government, Health and Human Services, Education, Natural and Economic Resources, and Justice and Public Safety – will meet at 8:30 a.m. Those on the Subcommittee on Information Technology have a 7:30 a.m. start time. Subcommittees are slated to review individual pieces of the budget today. Lawmakers have been told they should be prepared to meet both before a 10 a.m. floor session and later in the day. 

House leaders said a full version of the budget should be available at some point over the weekend and that the full Appropriations Committee would review the bill on Tuesday. 

THE SENATE ... is off today. 

THE HOUSE: The state House is scheduled to meet at 10 a.m. Among the bills on its calendar are a tax reform proposal, a measure that would move the state toward allowing fracking, and a bill remaking how Wake County school districts are drawn. 

House session: Tax reform House approves tax reform plan WRAP: Capitol Bureau Chief Laura Leslie and reporter Mark Binker review Thursday's action at the General Assembly in The Wrap @NCCapitol

TAX REFORM: After a public dust-up between leaders this week, the House is ready to vote on tax reform today. The proposal would cut the state's income tax rates from a three-bracket system of 6 percent, 6.75 percent and 7.75 percent to a flat tax rate of 5.9 percent starting in 2014. The standard deduction would be doubled. Corporate taxes would be cut from 6.9 percent currently in annual increments to 5.4 percent by 2018. Franchise taxes would also be cut.

The original bill would have capped deductions for mortgage interest, property tax and charitable contributions to no more than $25,000 total for a married couple filing jointly. After some members of the Republican caucus rebelled, the proposal was amended to allow unlimited deductions for charitable contributions, while keeping the cap on mortgage interest and local property tax deductions at $25,000.

Removing the cap on charitable deductions increased the cost of the package from $1.2 billion over five years to $1.7 billion.

ANALYSIS: One line of debate you're likely to hear on the floor today is that while the House plan cuts taxes at almost all income levels, it is far more generous to high income earners. An analysis provided to lawmakers shows a typical family filing jointly with two children that made $40,000 a year would save $42 under the plan, while a married couple with two children making $4 million a year would save $62,181.10.

Critics will also take aim at the fact that while net tax exposure goes down in almost all income categories, earners at all levels would pay more in sales taxes. Those taxes, in percentage terms and as a percentage of their income, would rise faster at lower income brackets than for higher ones.

Backers of the plan will argue that the shift toward consumption-based taxes will help spark the economy and boost everyone's income level. 

"Under this plan, the working families of North Carolina will see more dollars in their pocket, and our state will become more competitive," Rep. David Lewis, R-Harnett, the plan's author, told the committee.

In the estimates provided by the legislature's fiscal research division, two cohorts of people would likely pay more in taxes under the House plan: Couples married and filing jointly who had no children and made either roughly $20,000 or roughly $100,000. 

NOTED: Other stories we were following Thursday included:

OREGON INLET: The state would create a task force to study acquiring Oregon Inlet and adjacent land under a bill that cleared the state Senate Thursday. Sen. Harry Brown, R-Onslow, offered the measure as an amendment to House Bill 707, a measure mostly aimed at keeping shallow draft navigation channels clear. "I think it's important to take a look at what's going on in Oregon Inlet and this task force will do that," Brown said. A similar measure had been part of the Senate budget.

FRACKING: The House version of a Senate bill that would fast-track fracking in North Carolina is headed for a floor vote after an okay Thursday by the House Environment committee. The rewrite of Senate Bill 76 restores several key safeguards and protections Senate leaders wanted to remove from current law, most notably a requirement that lawmakers must vote to approve the final rules before fracking can begin in 2015. The Senate version would allow the Department of Environment and Natural Resources to allow fracking to start without legislative approval. Under the House version, DENR could begin issuing permits March 1, 2015 if the rules are finished, but those permits would not be valid until the General Assembly gives the go-ahead.

TRANSPORTATION: Gov. Pat McCrory, in his first visit to the DOT board, told leaders to improve efficiency at the Division of Motor Vehicles. He also pushed legislation to change the funding formula for transportation. The governor wants more tax money directed to large, high traffic projects. Later in the day, McCrory appointed two members to the DOT board, including Jim Crawford, a former Democratic lawmaker from Granville County. Crawford sometimes sided with Republicans during the 2011-12 session on important votes, including on whether to override Gov. Bev Perdue's budget vetoes.

UNC: University of North Carolina at Chapel Hill Chancellor Holden Thorp is dismissing an Honor Court case against a sophomore who has questioned the university's handling of sexual assault cases, he said in an email to students and employees Thursday afternoon. Landen Gambill was charged with violating UNC's Honor Code for allegedly creating an intimidating environment for a man who she says raped her, although she never publicly named him. A campus board cleared him of the sexual assault charge and found him guilty of harassing her. In March, Gambill and four other women filed a complaint with the U.S. Department of Education's Office of Civil Rights to look into what they called an atmosphere of sexual violence at the school.


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  • DALEJRBUDMAN Jun 7, 2013

    You people have no clue what you are talking about for starers, the state employees are not in a union only the teachers are. Yes the democrats took care of teachers and state troopers by singleing them out of the rest of state employees and giving them raises in years when the rest of us got nothing. You people get on here and ramble on about garbage when both republicans and democrats could care less about any of you. They are in it for themselves, the very first thing that should happen is set term limits, make corporate contributions illegal, and set up a flat tax. none of this is ever going to happen because the people with money make the laws to help themselves!!!!

  • A Libertarian Jun 7, 2013

    junkmail - I am not sure about all 50 states, but I am not aware of any state that has non-union teachers.

    As far as other industries - not the case. I would never join a union and I am not aware of any union job that would match my pay. Maybe some of the top union bosses that the unions love to send their money too - but not the worker type laborers.

    So, your argument fails 2 for 2.

    We are talking about taxpayers. We are tired of paying taxes for unions. They just forward to money back to the liberal and socialists politicains and an endless loop. Conservatives will gladly pay good techaers significantly more money, but refuse to support politicains though unions dues and we are tired of paying the useless teachers that are protected via unions!!!

  • junkmail5 Jun 7, 2013

    68_dodge - If the teachers and state employees want a raise, simple get rid of the unions- Jonnyplusthree

    You realize statistically pay is LOWER in non-union jobs than in union ones (in the same given industry), right?

    So- exactly the opposite of what you suggest

  • 68_dodge_polara Jun 7, 2013

    "68_dodge_polara, that is a laugh. What? Were the democrats good to the teachers in all the years they have ran NC?"

    No, that's why they are being paid so little now. But if the current legislature were to improve this one issue I believe they would stay in charge but if they don't it gives the efforts buy NCblue much ammunition.

  • Vox-Populi Jun 7, 2013

    I hope the NC State GOP have enjoyed controlling the state legislature for the last three years, because if they continue to alienate voters like myself--centrist independent and unaffiliated voters-- even the highly favorable voting districts they created won't keep them from losing control of the legislature in 2014.

  • A Libertarian Jun 7, 2013

    68_dodge - If the teachers and state employees want a raise, simple get rid of the unions and work for common sense pay. I as like most conservatives will NEVER support giving money to teachers unions and their supporters. COnservatives want to give large raises to good teachers and rid the bad ones, just like corporate. But as long as you guys keep supporting and force tax payer to support unions though dues, guarenteed retirement (though taxes), etc - you will always have low pay. I as like most conservatives would love to pay teachers a 6 figure income, but I refuse to pay unions and tenue teachers that are worthless.

  • geoherb1 Jun 7, 2013

    whatelseisnew: I saw a revealing chart the other day showing how much different income levels pay in taxes as a percentage of their incomes. The regressive nature of sales taxes and property taxes leads to lower income earners paying a larger percentage than higher income earners. And that was under the current laws. Things will get a lot worse once the Legislature starts adding all of these new taxes.

  • Singlemalt Jun 7, 2013

    68_dodge_polara, that is a laugh. What? Were the democrats good to the teachers in all the years they have ran NC?

  • uscnnc Jun 7, 2013

    Wonder how big a bonus they will be getting in their payments from big oil and the Koch brothers? Those are cash payments

    Probably the same size bonus George Soros and Hollywood gives the liberals.

  • HockeyPlayerX Jun 7, 2013

    While it is good to see a flat tax rate, I'd much rather see the state income tax, and corporate taxes, abolished. As long as NC is gouging employers, and sticking it high income earners, our unemployment rate is going to remain high. There has to be some reason for businesses to relocate to North Carolina...and confiscatory tax rates for the company and it's officers is not a very compelling one.