GOP leaders call for tax cuts this year
More tax cuts will likely be on the agenda during this year’s legislative session, Senate leader Phil Berger said in his Jan. 11 opening day speech. “We must further reduce taxes,” he said, then provided more details to reporters afterward.
Changes in the personal and corporate income tax rates as well as the franchise tax could be in the works.
On the personal income tax rate, “I personally would like to see us get it down below 3% –
2.5 has been a number that I have talked about,” Berger said. “The corporate rate, we already have it on a glide path to zero; there are some folks that have talked about accelerating that.”
Eliminating the franchise tax has been a goal of the N.C. Chamber and other business groups, but such legislation didn’t make it across the finish line in previous years.
“Franchise tax continues to be something that folks in the business community feel is one of the few remaining impediments to job creation and job development,” Berger said.
House Speaker Tim Moore also voiced support for tax cuts but was less specific about what he’d support.
“We would certainly support further tax cuts,” he said. “What we want to do is to make sure that there are triggers or something in place so we don’t get ourselves in a jam where we move too far, too fast, and we end up creating a shortfall,” he said.
House Democratic Leader Robert Reives said that “you’re always open to discussion on anything when it comes to tax policy. I would like to see the opportunity for relief for working families.”
Both Berger and Moore noted that tax decisions will be based in part on economic conditions and state revenue projections, which so far exceed forecasts. According to an early January report from the Office of State Controller, the state has $3.72 billion in
unspent revenue.
State regulations on wine shipments upheld
Out-of-state wine retailers still cannot ship to North Carolina consumers after the U.S. Supreme Court declined to hear a lawsuit challenging the regulation.
North Carolina law allows customers to have wine shipped to their homes from in-state retail companies, but not from businesses outside the state. A Florida-based retailer called B-21 Wines sued the N.C. ABC Commission, arguing that the prohibition was unconstitutional and violated interstate commerce laws.
But a lower federal court ruled in favor of the state’s argument that the regulation isn’t discriminatory because it accomplished state policy objectives such as tax collection and public health. The Supreme Court’s decision not to take the case leaves the 4th Circuit Court of Appeals ruling as the final word.
The N.C. Wine and Beer Wholesalers Association praised the decision. “The outcome of this case is a testament to the N.C. General Assembly’s long-standing approach to sensible, state-based alcohol regulations as well as the efforts of the N.C. Attorney General’s Office in defending these laws,” association Executive Director Tim Kent said in a news release.
Inflation hits campaign contribution limits
Here’s an unfortunate sign of the economic times: The maximum campaign contribution for state races is increasing by $800 per election, from $5,600 to $6,400.
The legislature tied that figure to the consumer price index, so the State Board of Elections said the change reflects a 14.35% increase in the index from July 2020 to July 2022. By contrast, the maximum contribution increased by just $200 during the last election cycle.
State legislators’ salaries, however, aren’t tied to inflation and haven’t increased from $13,951 since 1995. Using a COU inflation calculator, lawmakers should be making the princely sum of $27,253 by now. Many lawmakers earn thousands of additional dollars through per diem payments, however.
Rising stars as Senate picks new committee chairs
Senate leader Phil Berger’s committee assignments for this year’s session didn’t include many surprises as most key senators are returning to the same roles as last year.
But a few new assignments suggest these senators are rising stars in the chamber
this session.
1. Sen. Michael Lee, R-New Hanover, will become an appropriations co-chair, replacing Sen. Kathy Harrington. It may be a reward for Lee, whose close election victory helped deliver a supermajority for the GOP.
2. Sen. Jim Perry, R-Lenoir, will become co-chair of the Finance Committee, replacing Sen. Warren Daniel, R-Burke, who’s moving over to co-chair the Judiciary Committee. Daniel will also serve as a vice chair for Senate Rules Chairman Bill Rabon.
3. Sen. Kevin Corbin, R-Macon and one of the earliest GOP backers of Medicaid expansion, will replace Perry as a co-chair of the Health Care Committee.
4. Sen. Amy Galey, R-Alamance, will replace Sen. Deanna Ballard as a co-chair of the Education/Higher Education Committee.
5. Sen. Michael Lazzara, R-Onslow, will replace Sen. Danny Britt as one of the co-chairs of the Transportation Committee.
