Bad NC budget (mostly) spares Charlotte
Well, it could have been worse.
Given the half-baked budget schemes flying around the General Assembly this year, that’s about the best that can be said about the spending plan that has finally emerged in Raleigh.
The budget continues the ongoing rewrite of the state tax code, cutting corporate and personal income taxes in ways that predominantly benefit the wealthy, while increasing sales taxes in ways that shift heavier burdens onto the poor and the middle class.
The Senate sought to add a new sales tax wrinkle – taking money from prospering (and Democrat-heavy) urban counties and giving it to struggling, Republican-friendly rural ones.
Thankfully for Mecklenburg taxpayers, the House objected. The budget compromise instead adds new sales taxes to repair, maintenance and installation services. That money goes to rural counties; urban ones keep their current sales tax revenue.
Those new taxes will mean higher car repair bills, often for low-income people who tend to drive older vehicles. It’s the kind of 11th hour surprise we’ve warned Republican legislators against, and that Gov. Pat McCrory has threatened to veto. (No word as of Wednesday afternoon on whether he would indeed do so).
The fact that Republicans did it anyway speaks to how strongly they feel about helping rural areas. That obvious passion makes what they did with renewable energy tax credits all the more puzzling.
Those tax credits have boosted struggling rural counties, giving farmers a new income stream from their land. Economically depressed Robeson County has seen more than $170 million in investments from green energy projects. Solar energy has created 5,600 full-time jobs in the state since 2014, according to the Environment North Carolina Research and Policy Center.
But lawmakers will let the energy credits expire. They were willing to raise sales taxes to help rural constituents, but they balked at using targeted tax breaks to grow one of the few industries showing sustained interest in rural North Carolina. Why? Because that would be favoring one industry over another – anathema to any free-market-loving conservative.
Favoring rural taxpayers over urban ones? Well, that’s OK. That’s the bipolar political environment we live in now, especially in the hard-right Senate. We are warring regions, not one state. We oppose raising taxes, unless we’re raising them from our enemies to benefit our base.
The budget represents a continued shriveling of the ambitions of a state that once led the region, but now struggles to keep up with South Carolina in economic development and barely outpaces Mississippi in per-pupil education spending.
Yes, we pay less in income taxes. But North Carolina is poorer for it.
This story was originally published September 16, 2015 at 4:56 PM with the headline "Bad NC budget (mostly) spares Charlotte."