Representative Harry Warren
♦This week started out with a compromise agreement between the House and the Senate on the Tax Revision Plan. A special press conference was held at the “Old Capitol Building,” where Governor Pat McCrory was joined by Senate President Pro Tempore Phil Berger and House Speaker Thom Tillis to unveil some of the details about the plan, touted to be the largest tax cut in the history of North Carolina. Public reaction to the bill was predictably along party lines. Republicans and conservatives praised the provisions of the bill while Democrats and more liberal fractions criticized the plan as regressive to the poor and generous to the rich. Here is the plan:
HB 998 – The Tax Simplification and Reduction Act. This is a continuation of the relaxation of taxation that the Republican controlled General Assembly started in 2010, when they began their first time at the helm of the state government facing a $2.5 billion dollar deficit and kept their campaign promise to discontinue the surcharges on the State Sales Tax and the State Personal Income Tax. While critics insist on calling this plan a tax cut rather than a revision, the fact is that tax revision is a process, not a single event. This plan represents the first step toward a migration from traditional revenue sources based on a manufacturing economy to one based primarily on a service economy. This plan includes a limited expansion of the sales tax and the sunsetting of tax exemptions to offset revenue reductions due to lowering the personal income and corporate income tax rates and raising the standard deductions. You can use the link here to read the actual bill. Excerpts from various news stories and the links to the full stories (below) will give you some idea of the media reaction to the plan.
Wall Street Journal: A Tar Heel Tax Cut at Last
“The plan is an impressive trifecta that will slash the personal income tax to 5.75% from 7.75%; cut the corporate tax to 5% from 6.9%; and eliminate the state death tax.” (Stephen Moore, ”A Tar Heel Tax Cut at Last,” The Wall Street Journal, 7/16/2013)
Burlington Times-News: Editorial: GOP tax reform proposal worth a gamble
“Among the highlights would be a repeal of the long-dreaded estate tax. In addition, the state gas tax, one of the highest in the nation, would be capped at 37.5 cents per gallon through June 30, 2015.
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“Overall, the GOP wanted tax rates more competitive with North Carolina’s neighbors. It’s a reasonable goal. The current top individual and corporate rates here are the highest in the Southeast. Small wonder that new businesses are hesitant to take root here.” (Burlington Times-News, “Editorial: GOP tax reform proposal worth a gamble,” 7/16/2013)
Tax Foundation economist Scott Drenkard
“The tax package in NC is in my opinion 1 of 3 of the most beneficial state tax reforms in the last decade.” (Scott Drenkard, economist at the Tax Foundation, 7/17/2013)
Carolina Journal Online: N.C. Tax Reform Plan ‘Blew Other States Away,’ Analyst Says
“Patrick Gleason, director of state affairs at Americans for Tax Reform, spoke to the reduction in the top marginal income tax rate of 7.75 percent that would be drop in 2015 to 5.75 percent. ’North Carolina, with a 25 percent reduction in the top rate, pretty much blew the other states away,’ Gleason said. Gleason and Elizabeth Malm, an economist with the nonpartisan Tax Foundation, said that North Carolina ranks at the top of the nation in magnitude of tax reforms this year.
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“‘This is the biggest one we’ve seen this year,’ Malm said, referring to amount of money that would stay in taxpayers’ pockets instead of going to the state as a result of the proposal.” (Barry Smith, “N.C. Tax Reform Plan ‘Blew Other States Away,’ Analyst Says,” Carolina Journal Online, 7/17/2013)
Triangle Business Journal: Lane:Tax reform helps business, individuals
“By changing elements such as what he [Brent Lane, director of UNC’s Frank Hawkins Kenan Institute of Private Enterprise] calls an ‘uncompetitive’ and ‘inefficient’ 6.9 percent corporate tax rate, the bill paves the way for large businesses that might otherwise look to operate in other states to come to North Carolina without significantly detracting from the state’s revenue, he says.” (Thompson Wall, “Lane: Tax reform helps business, individuals,”Triangle Business Journal, 7/16/2013)
Associated Press: N.C. governor, legislative leaders announce tax deal
“The plan was hammered out after months of discussions. Final passage is expected later this week by the Republican-controlled General Assembly.
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McCrory wanted rates more competitive with surrounding states. The current top individual rate and the corporate rate are the highest in the Southeast.” (Gary Robertson, “N.C. governor, legislative leaders announce tax deal,”Associated Press, 7/15/2013)
Triangle Business Journal: McCrory, House and Senate reach tax-reform deal
“At the same time, the plan raises standard deductions, representing a break for lower- and middle-income individual taxpayers. McCrory said the cuts will ‘make North Carolina more attractive to job-creators.’” (Chris Bagley, “McCrory, House and Senate reach tax-reform deal,” Triangle Business Journal, 7/15/2013)
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The Governor started the week with close to70 bills on his desk awaiting his signature or veto, as the case may be. By the end of the week, he had acted on approximately 45 of them. Here is a list of 10 of them that you may find interesting ………..
HB 26 – Strengthen Laws/Vehicle Theft. This law will strengthen the laws protecting against the theft of vehicles for disassembly and resale of parts and to assist law enforcement in the investigation of organized criminal activity associated with the theft of vehicles.
HB 137 – Reward Amt/Arrest of Fugitive from Justice. This act will increase the reward amount that the Governor may offer for the apprehension of a fugitive from justice or for information leading to the arrest and conviction of a fugitive from justice.
HB 232 – State Health Plan/Statutory Changes. The law makes technical and other changes to the State Health Plan for Teachers and State Employees Statutes, as requested by the State Health Plan.
HB 250 – Charter School Enrollment and Charter Revisions. This act provides for enrollment priority and procedures for certain students applying to charter schools and makes changes as to what qualifies as a material revision to a charter application.
HB 428 – North Carolina School Bus Safety Act. This is an act to provide that the punishment for passing a stopped school bus in violation of G.S. 20-217 shall include a fine in all circumstances, a revocation of the person’s drivers’ license in certain circumstances, and disqualification of the person’s commercial driving privileges in certain circumstances; to provide that the Division of Motor Vehicles shall withhold the registration renewal of a person who fails to pay any fine imposed pursuant to G.S. 20-217; and to encourage local boards of education to use the proceeds of any fines collected for violations of this statute to purchase automated camera and video recording systems to install on school buses.
HB 510 – Foster Children’s Bill of Rights. The bill sets up a Foster Children’s Bill of Rights under the laws pertaining to control over child placing and child care.
SB 140 – Financial Exploitation of Older Adults. This is an act to increase the recognition, reporting and prosecution of those who would defraud or financially exploit disabled or older adults and to continue the task force on fraud against older adults, as recommended by the Task Force on Fraud Against Older Adults.
SB 248 – Choice of Hearing Aid Specialist. This law will ensure that patients have the right to choose their hearing aid specialist under their health benefit plans, will authorize the North Carolina State Hearing Aid Dealers and Fitters Board to increase certain fees, and makes technical changes to the statute on choosing services of providers.
SB 372 – Omnibus County Legislation. This is an act to require notice and an opportunity for comment from county boards when permits for land application of waste within that county are issued by the Environmental Management Commission. It increases the threshold for the Department of Transportation’s informal bid procedures and clarifies the Department’s policy concerning participation by disadvantaged minority-owned and women-owned businesses as it applies to contracts let using those procedures. In addition, it provides for a study of state payments in lieu of taxes of public lands.
The House calendared more than 65 bills and Resolutions this past week. Many of them were bills presented for a vote of concurrence and many more were local bills. A few of the more interesting public bills included:
SB 81 – Charlotte Douglas International Airport. This Senate bill will bring the airport under the guidance of a regional airport authority consisting of an 11- member board comprised of four from Charlotte and one each from Mecklenburg, Cabarrus, Gaston, Iredell, Lincoln and Union counties. These 10 members will select the 11thmember.
SB 337 – NC Charter School Advisory Board. This is an act to create the North Carolina Charter Schools Advisory Board and make other changes to charter school laws.
SB 444 –UNC/Cherokee Language. This bill would allow the Cherokee language to be recognized and accepted as a fulfillment of a foreign language requirement in the UNC system for students whose course of study required a foreign language. I find that sadly ironic given that it is a Native American language.
SB 626 – Recodify Animal Shelter Law. This bill recodifies procedures for the holding and disposition of animal shelter animals and addresses statutes covering topics from rabies to welfare status.
SB 321 – Contain Counties Inmate Medical Costs. This act caps reimbursement to counties for medical services rendered to inmates in county jails and allows counties to utilize Medicaid for eligible inmates.
SB 558 – Treasurer’s Investments. This is an interesting bill that generates debate over opposing investment views. It amends the law governing the State Treasurer’s investment authority with regard to special funds and allows more flexibility in allocating assets in the State investment portfolio.
For our gun enthusiasts, the House heard:
HB 618 – Amend Firearm Restoration Law. This is a reversion back to a ten-year period for restoring revoked gun rights under certain conditions, versus the current 20-year ban.
HB 937 – Amend Various Firearm Laws. A vote was taken by the House not to concur and the bill will go into a conference committee for resolution of conflicts. It will most likely pass the House next week
HR 63 –Support Right to Bear Arms. This was a Resolution , a statement of the constitutional right to bear arms.
Congratulations to Mr. Bill Graham of Salisbury. Mr. Graham has been appointed by Governor McCrory to the newly formed North Carolina Economic Development Board. He will serve as an at-large member. A one- time candidate for the Governorship, Mr. Graham is a partner at the Wallace & Graham, P.A. legal firm in Salisbury. He also serves on the Catawba College Board of Trustees.
As I write this, the Senate is in session and various House Appropriation Committee Chairs and members are working on the final touches of the State Budget. I expect the budget to be “polished” and prepared for presentation to the Republican Caucus by Monday of next week and passed by both Chambers by Thursday. This has been a session very different from the last one, but similar in the fact that some monumental changes have been legislated.
Even though the long session will most likely end next week, I will try to provide you with a periodic update/review during the interim period until the “short” session convenes in May of 2014. Next week will be the last regular weekly newsletter.
Thank you for the opportunity to represent Rowan County and for the support, feedback (positive and negative) that you have given me on the many diverse issues that have come before us in the General Assembly. Your thoughts have been both helpful and influential in the decision making process.
N.C. House of Representatives District 77, Rowan County
611 Legislative Office Building Raleigh,
North Carolina 27603
(919) 733-5784
