Tuesday at the General Assembly
– House Republicans have introduced legislation to make changes to the state tax code to conform with recent federal changes. The bill could cost the state as much as $349 million next year if approved. But GOP legislators say without the changes that businesses will look elsewhere to invest. “Rather than tax fairness and simplification, North Carolina will have tax inequities and complications,” said Rep. Art Pope, R-Wake, one of the primary sponsors. The bulk of the federal tax code changes that state lawmakers are looking at were approved by Congress in March as part of President Bush’s economic stimulus package. The federal legislation allows businesses to accelerate the depreciation of business equipment. Democrats say there isn’t enough money to conform to that change, but that they will duplicate changes affecting pensions and retirement plans.
– For another day, the Legislative Building was filled with people trying to have their voice heard in the budget debate. Advocates for Smart Start, three hundred strong, gathered to urge legislators not to cut taxes. But about 400 members of the anti-tax group Citizens for a Sound Economy walked the halls and listen to speakers decry tax hikes and call on lawmakers to cut government waste.
– Rep. Mickey Michaux filed a host of tax bills that he says will raise up to $1 billion. The bills would increase the tax on cigarettes from 5 cents to $1; end a sales tax cap on boats, planes and railway cars; do away with a sales tax cap on business machinery; repeal a tax credit for cigarettes manufactured in this state but sold overseas; and eliminate an interest expense tax deduction for banks. Michaux said he filed the bills because, “We can’t cut our way out of this deficit.”
– The House Rules Committee approved legislation that would prevent the governor from taking franchise taxes and revenue collected by the state for local governments. The legislation has been pushed by local governments after Gov. Mike Easley took $114 million in such funding from cities and counties to help meet a budget shortfall expected to reach $1.5 billion. The bill now goes to the House Finance Committee.