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Constitutional amendments delayed after change

Posted August 10, 2015 9:02 p.m. EDT
Updated August 10, 2015 10:19 p.m. EDT

— Senate leaders decided to postpone until Tuesday a vote on budget-related constitutional amendments after making a major revision to the bill Monday night.

Senate Bill 607 would make three changes to the state constitution: It would cap the state's individual and corporate income tax rate at 5 percent, would require a rainy-day fund for a crisis that couldn't be spent without a two-thirds vote of the legislature and would cap annual state spending at no more than estimated population growth plus inflation, a limit often known as the "Taxpayer Bill of Rights," or TABOR.

Monday night, sponsor Sen. Brent Jackson, R-Sampson, unveiled an amendment to the bill that would make two major changes to it.

First, it would add a dollar amount requirement for contributions to the constitutional rainy-day fund. Beginning in 2016, the legislature would be required each year to deposit an amount in the fund equal to 2 percent of the prior year's appropriated budget. In 2016, that would be around $420 million.

Those 2 percent annual deposits would continue until the fund reaches 12.5 percent of the budget, or around $2.6 billion.

The second major change would combine all three of the proposed constitutional amendments into a single ballot question. Voters couldn't vote for one proposal and against another. They would have to vote to approve all three or none.

Jackson said the three together are an "integrated" tax strategy that "will strengthen the fiscal integrity of the state and protect the taxpayers from government overreach."

But Democrats criticized the move.

"If a citizen was to conclude that having a rainy-day fund makes a lot of sense but having the spending cap makes no sense at all," said Sen. Josh Stein, D-Wake, "as a voter, you’re denying them the right to choose the rainy-day fund but not the other two."

"I don’t know that we’re denying the voters anything," Jackson replied. "Basically, what we felt like, these three went together like a glove."

Democrats also sharply criticized Republicans' insistence that Jackson's amendment be voted on Monday night, even though the bill itself was postponed till Tuesday, arguing the amendment needs more review and debate.

"I don’t think amending the state constitution should be done on the fly," Stein argued. "It is disrespectful of the importance of that document. It’s disrespectful to the people of North Carolina. I don’t know if it’s a good idea or not, but I’m voting no."

"This is a $2.6 billion appropriations bill, and we’re going to vote on it having spent less than half an hour addressing it?" added Sen. Jeff Jackson, D-Mecklenburg. "That is not prudent. That is not fair to the taxpayers of our state."

State Treasurer Janet Cowell warned lawmakers in a letter Friday that the package of amendments could endanger the state's financial stability and its credit rating. When asked, Brent Jackson said he had not sought feedback from rating bureaus or bonding experts on either the proposal itself or on the details of his amendment, such as the 12.5 percent rainy-day cap, a number he said he chose because "I think we can get [it] passed."

"We tried to pick a medium number we thought this body could agree on and the body across the hall could agree on as well," he said.

Brent Jackson concluded by reminding his colleagues that the voters, not the legislature, will make the final call on the proposal in 2016.

"That voter out there in the countryside – that poor ideological fool that we sometimes think them to be – we’re going to allow them the opportunity to make that decision for us," he said, "those people that are paying the taxes, that are working every day."

The amendment passed on party lines.