Today @NCCapitol (June 7): House lawmakers meeting Friday to tackle budget and taxes
Posted June 7, 2013
Raleigh, N.C. — 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.
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.