RALEIGH, NC (WNCN) – With the state taking in billions of dollars more than expected this year, Republican Legislative leaders say they are considering more tax cuts, while Democrats are proposing some specific changes they want to see.
A report last week showed that North Carolina will bring in about $6.2 billion more than expected in the current two-year fiscal cycle.
With inflation quickly driving up the cost of living, Senator Natalie Murdock said Senate Democrats will propose a range of measures, including a temporary suspension of the state’s gas tax.
“We have a budget surplus. We have the additional funding. If today isn’t a rainy day, I don’t know what is,” she said. “We are in a tsunami. Guys, we hear you loud and clear. They really, really fight like never before. Even if you got a raise, if it wasn’t over 8 or 9 percent, you’re not keeping up with the pace of inflation.”
The gas tax is 38.5 cents per gallon. Some other states, including Georgia and Maryland, enacted temporary suspensions of their gas taxes soon after the Russian invasion of Ukraine began.
Gov. Roy Cooper (D) did not propose any tax cuts in his budget released last week. The gas tax finances the transport. Cooper’s office says the state needs to ensure these projects have the funding to proceed.
“With any tax cut, we would need to make sure that the savings are actually passed through to consumers at the pump and not just added to the oil and gas companies’ bottom line,” Jordan Monaghan, a spokesman for Cooper, wrote in an email earlier this year .
Murdock said Senate Democrats would also call for bringing back the back-to-school sales tax holiday, which Republicans scrapped in 2013.
“We are really pushing to bring economic relief to working families and people and we are all remembering this sales tax holiday. I grew up with these sales tax holidays,” Murdock said. “We think that would be a really, really powerful way to bring some relief to parents and students this year.”
As part of the budget compromise passed late last year, Republicans made cuts to personal and corporate income tax rates that will be phased in over the next few years.
Republican House Speaker Tim Moore said talks about more tax cuts, including a possible rebate, would be held during the legislative session that begins this week, but he didn’t give specifics.
“I don’t want it to look like a gimmick,” he said. “I want to make sure that the tax policy that we are considering is actually something that gives people back their money that is not needed by the government. At the same time, it is actually something that will pay off later on.”
He said Republicans are also discussing additional pay rises for state employees beyond what has already been approved for the next fiscal year. He said they were trying to weigh what to do with the surplus with the potential for an economic downturn.
“We don’t know how far we’re going into a recession nationwide? Will things improve? We do not know it. So there are some real danger signs out there,” he said.
https://www.cbs17.com/news/capitol-report/billions-in-surplus-nc-republicans-consider-more-tax-cuts-democrats-pitch-changes/ Billion Surplus: NC Republicans Consider More Tax Cuts; The tone of the Democrats is changing