Opinion

Editorial: Legislator's demotion highlights backroom deal, potential conflicts of interest

Thursday, April 22, 2021 -- Service in the General Assembly - or any other elective office - is a public trust. It is not a secret society where deals that benefit those public servants are cut outside of the public view. More and more the closed party caucuses are the forums where the REAL debates over policy and legislation occur. Public sessions are choreographed displays that too often disguise the true intent and issues at hand.

Posted Updated
Rep. Julia Howard, R-Davie
CBC Editorial: Thursday, April 22, 2021; Editorial #8661
The following is the opinion of Capitol Broadcasting Company.
State Rep. Julia Howard, a Republican from Davie County, knows something about party loyalty having served 17 terms in the General Assembly. She’s also learned that money is thicker than GOP blood. That lesson came when she tried to put the brakes on House Bill 334 that would financially benefit dozens of lawmakers – including House Speaker Tim Moore -- who’ve been getting federal COVID-19 relief money from the Paycheck Protection Program (PPP).
When Howard used her key position as chair of the House Finance Committee to hold up the legislation, Moore, R-Cleveland County, ordered her to get it out of the committee and onto the House floor for a vote. He stripped her of her leadership post and kicked her off the committee.
Howard was concerned about both the ethics of legislators having such a direct and significant benefit from legislation they were considering (bill supporter and House Finance Committee senior chair Rep. John Bradford, R-Mecklenburg County, could get a $20,000 benefit as a result of the legislation) as well as the lack of similar benefits extended to those who receive unemployment payments, which are subject to state and federal income taxes. Federal income taxes, at a 10% rate, are withheld from unemployment benefits.
Unlike some tax policies, this legislation only would impact the specific businesses that qualified for the PPP loans – mainly those that are privately-held and have 500 or fewer employees. Further, these companies, about 5,350 in the state, don’t have to count the loans as income while still being able to deduct them as a business expense. This federal double-dip would be extended to state income taxes with House Bill 334.

Before the bill received final House approval, it was amended to allow those receiving unemployment benefits to deduct up to $10,200 from their income taxes – about 17 weeks of typical payments and similar to a special federal COVID-19 deduction for 2020. There is no limit on the deductions for the PPP loans – which under certain circumstances are forgivable from repayment.

Moore and his deputies defended their behavior ousting Howard from her leadership post, saying a deal had been cut in a closed-door meeting of Republicans to move the bill. "Several weeks ago, the North Carolina Republican House Legislative Caucus overwhelmingly voted to move forward on House Bill 334. ... Over the proceeding weeks, against the will of the caucus, Rep. Julia Howard, in her role as one of four Senior House Finance Chairs did not move the bill," said a statement from Moore, House Speaker Pro Tem Sarah Stevens, R-Surry County and House Majority Leader John Bell, R-Wayne County.

Here's the rub. The House Republican Caucus has NO official standing (same goes for the Democrats’ caucus). It does not meet in public. There are no publicly available recorded votes.  Nothing done or said in those secret sessions is open to the scrutiny of the people legislators represent, the voters who put them into office or the news reporters who can shine light onto what they say and do.

Now Howard’s constituents have had their representative knocked down and on the outs with the leadership. All executed in back room deals.

Howard was right for raising her concerns. Her only fault is that she didn’t do it more prominently, in detail, in an open and public forum and on the record.

Service in the General Assembly – or any other elective office – is a public trust. It is not a secret society where deals that benefit those public servants are cut outside of the public view. More and more the closed party caucuses are the forums where the REAL debates over policy and legislation occur. Public sessions are choreographed displays that too often disguise the true intent and issues at hand.

Before this bill leaves the General Assembly EVERY legislator should disclose, in detail, if they or their businesses have PPP loans, how much and, ANY benefit they might gain if it becomes law. Legislation should be debated in the appropriate forums of open committee meetings and public chamber sessions.

North Carolinians have a right to know this information so they can judge for themselves – not simply from an opinion issued by legislative employee – if their legislators have conflicts and whether their actions are in the public interest. Citizens have a right to be a part of ALL discussions on legislation.

(NOTE: A previous version of this editorial stated that Rep. John Bradford was a sponsor of House Bill 334. He is not.  He supports the bill and is a senior chair of the House Finance Committee.)

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