NC Senate Republicans Want To Add Spending And Tax Caps To Constitution

Aug 11, 2015

Credit Dave DeWitt / WUNC

North Carolina Senate Republicans are looking to give voters the opportunity to add spending and income tax caps to the state’s constitution.

Bill sponsors say the constitutional amendments would add strong protections against over-taxation and government overreach.

“It allows us to plan for the future, to protect the budget, give it some stability,” said Senator Bob Rucho (R-Mecklenburg).

One provision of the amendment would cap the state’s personal income tax rate at five percent, instead of 10 percent.

Another would create a rainy day fund for times of crisis that could only be spent by a two-thirds vote in the legislature, and the third provision would tie spending increases to the rate of population and inflation.

In a 33-15 vote, Senators voted on Monday to combine all three provisions into one amendment, instead of three individual proposals.

Democratic lawmakers, like Senator Josh Stein (D-Wake), opposed Monday’s amendment, arguing that they needed more time to study the proposed changes.

“I don’t think we should be amending the constitution in a fundamental way on a provision that has never been debated anywhere to my knowledge before. I don’t know if it’s a good idea or not, but I’m voting against it,” Stein said before the vote.

He also argued that it's not fair for voters to combine all three proposals into one amendment.   

“These three went together like a glove,” refuted Republican Senator Brent Jackson. “We’re not trying to hide anything here. We thought it would be simpler to ask voters in one question.” 

State treasurer, Janet Cowell, released a statement last week that said she advised Senators to reject bill 607. She argued it would threaten the state’s triple-A bond rating.

“North Carolina has a long history of responsible fiscal management as evidenced by our status as one of only ten states in the nation with a ‘AAA’ rating from all three rating agencies,” Cowell wrote. “The passage of the Constitutional Amendment Tax Legislation poses real danger to our finances and reputation.”

Cowell said credit rating agencies historically perceive financial limitations imposed by this legislation as "credit negative."

Republican proponents of the bill responded to Cowell’s statements, arguing that the “real danger to our state’s finances and reputation are irresponsible politicians who tax and spend beyond our means and who rack up too much debt.”

“Allowing North Carolinians to vote to keep politicians from going on wild spending sprees will clearly protect our state’s financial health,” said Senate Appropriations Committee Co-Chairman Brent Jackson (R-Sampson) and Senate Finance Committee Co-Chairman Bob Rucho (R-Mecklenburg) in a statement.

For the amendment to make it on the ballot, the bill has to pass the Senate and House with a three-fifths majority in each. The Senate is expected to continue discussing the bill this week.