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Today @NCCapitol (July 16): Tax reform bill arrives

Posted July 16, 2013 5:48 a.m. EDT
Updated July 16, 2013 8:05 a.m. EDT

— Good morning and welcome to Today @NCCapitol for Tuesday, July 16. This is WRAL's roundup of what you need to know about North Carolina state government today.

THE BIG STORY: The long-awaited tax bill has finally arrived. 

Gov. Pat McCrory, House Speaker Thom Tillis and Senate President Pro Tempore Phil Berger rolled out a tax deal at the Capitol building Monday. Both the House and Senate are scheduled to give tentative approval to the plan today. And both chambers are expected to take second and final votes on Wednesday. The bill will then go to McCrory for his signature. 

McCrory called the measure "the most comprehensive tax reform package in North Carolina" history, praising the bill as "fiscally responsible, ensuring the appropriate revenues for state governments now and in the future." 

The measure reduces corporate and personal income tax rates and makes tweaks throughout the tax code, but is it "tax reform?" It depends on who you ask. 

One of the key principles talked up by Republican leaders earlier this year was the idea of "broadening the base" but "lowering the rates," particularly when it came to sales taxes. The idea was that you would tax more things and close loopholes that favored particular industries in exchange for lowering the amount of tax paid during any one transaction. By that measure, this bill could be viewed as falling short. It doesn't expand the sales tax base much and closes only a few loopholes. 

However, the measure does anticipate future changes, tasking an interim study committee with recommending more changes. And Tillis and Berger point out it will make filing corporate and personal income taxes easier, which will make filing taxes simpler and make North Carolina's rates compare more favorably to neighboring states. 

Others disagree. 

"Real tax reform would focus on closing special interest loopholes and establishing a tax code that treats all of our hardworking taxpayers fairly," Rep. Larry Hall, D-Durham, said.

Even some Republicans who are kindly disposed toward the bill say it doesn't achieve what is needed.

"Is this comprehensive tax reform? No. But this is the first step towards it," said Sen. Bob Rucho, R-Mecklenburg. Rucho headed up earlier efforts toward tax reform this year and pushed lawmakers to get to a zero income tax rate. 

SELLING THE BILL: Lobbyists and lawmakers are still reviewing the bill, but some interests are taking exception to it. For example, the North Carolina Association of Realtors objects to a provision that caps at $20,000 the combined deduction for mortgage interest and property taxes. 

"Increasing the tax burden on housing and home ownership will hurt the overall goal of tax reform to improve North Carolina's economy," said Realtors' chairman Mark Zimmerman.

Which should make McCrory's scheduled appearance before the group at 9:15 a.m. this morning all the more interesting. 

For more details on the bill:

BUDGET NEXT: Now that the tax plan is done, legislative leaders can turn their attention to crafting a state budget plan. That spending proposal has been on hold while lawmakers hashed over how much money could be expected in state coffers.

Estimates from leaders in both the House and Senate suggest that a budget deal could be done by the end of this week.

THIS WEEK'S SCHEDULE: Top legislative leaders are ready to leave town for the year.

"We would like to work 7 days a week, as many hours as we can until we get finished," Senate Leader Phil Berger said Monday night.

While House leaders didn't exactly embrace working on Sunday, there is definitely the prospect of unusual Friday sessions and possibly even some formal meetings on Saturday if there is work to do.  

TODAY'S SCHEDULE: For a complete listing of today's committee meetings and floor sessions, check the main @NCCapitol page. Among today's highlights:

HOUSE FINANCE (8:30 a.m. | 544 LB): Six measures are on the calendar. However, House Speaker Thom Tillis suggested the committee may also review the tax reform bill. 

HOUSE SESSION (10 a.m. | House Chamber): The House takes a first vote on the tax reform bill. Other measures on the calendar include a bill transferring control of Charlotte's airport from the city to a regional authority, a bill changing dozens of state firearms laws, and a bill dealing with state immigration laws. However, the immigration bill's sponsor, Rep. Harry Warren of Salisbury, says he now plans to amend the bill to simply study the driver's license expansion. Warren says the Department of Transportation is concerned because the license requirement would take effect in October. The legislation also would give police authority to detain anyone suspected of lacking documentation for up to 24 hours to verify legal status.

SENATE FINANCE (1 p.m. | 544 LB): Several bills on the calendar, including a package of technical changes to tax laws. 

SENATE SESSION (2 p.m. | Senate Chamber): The Senate takes a first vote on the tax reform bill. Other bills on the Senate calendar including a regulator reform measure and a bill creating a new charter school advisory board for the state. A measure that would force Durham to provide water and sewer to the controversial 751 South development has been delayed at least three times in the past week, but is on the schedule for consideration today again. 

WATCH OUT FOR: Reporters are on watch for packages of election reforms and Voter ID proposals this week. Those measures are expected to come through the Senate Rules Committee, which had been scheduled to meet at 9 a.m. today but is now marked as "canceled." 

COUNTER PROTEST: Republicans are scheduled to hold a rally at the General Assembly today called "Thankful Tuesday." The demonstration is meant to be a counterweight to the Moral Monday protests, which have objected to legislative policies. The Thankful Tuesday crowd will be made up of conservatives who back the Republican-controlled legislature and governor. 

Speakers at the event are expected to include state Republican Party Chairman Claude Pope, Vice Chairwoman Joyce Krawiec, Conservative Speaker Clarence Henderson, and N.C. Values Coalition Executive Director Tami Fitzgerald.

MORE STORIES: Other stories we were following Monday included: 

APPOINTMENTS: Gov. Pat McCrory has appointed a slate of 22 business executives, most of who are also campaign donors, to the North Carolina Economic Development Board. The 37-member board, which will hold a meeting on Wednesday, "oversees state economic development research and planning and makes policy recommendations to the secretary of commerce, the governor and the General Assembly."

SUIT DROPPED: A former state Democratic Party staffer has dropped his defamation suit against the party. Adriadn Ortega claimed last year that the party smeared him after he claimed then-executive director Jay Parmley had sexually harassed him.

ABORTION: The Senate isn't going to act immediately on a House bill further regulating abortion in North Carolina even though Gov. Pat McCrory says he'd sign it into law if it came to his desk.

ARRESTS: Just over 100 people were arrested Monday after their singing and clapping protest outside the state Senate chamber was declared an unlawful assembly, in what has become a weekly demonstration against Republican initiatives. The 11th 'Moral Monday' protest at the state legislative building focused on the rights and leadership of women and decried the acquittal of George Zimmerman, a Florida man who claimed self defense in the shooting death of 17-year-old Trayvon Martin.