Fact-checking some of the claims in the debate

Dalton, McCrory prove it’s all about the context

jfrank@newsobserver.comOctober 4, 2012 

The two major-party candidates for governor made an assortment of claims in their first statewide televised debate Wednesday. Here’s look at the truth behind their political assertions from The News & Observer’s fact-checking team:

TAX INCREASES

CLAIM: “There is only one person up here who has proposed new taxes and that is the lieutenant governor along with Gov. Perdue, when just three, four months ago they were recommending a 15 percent sales tax increase.”

SPEAKER: Republican candidate Pat McCrory

CONTEXT: McCrory hit his Democratic rival early in the debate for supporting a sales-tax hike pitched earlier this year by Gov. Bev Perdue. The governor’s budget proposal for fiscal year 2012-13 included a plan to increase the 4.75 percent state sales tax by three-quarters of a penny, to 5.5 percent, in order to better fund public education at a time of budget cuts. That amounts to a 15.7 percent increase.

Soon after announcing he would run for governor in January, Dalton embraced Perdue’s plan for the sales-tax hike, saying he felt public schools needed more money.

But in August, Dalton reversed course. If elected, Dalton now vows not to increase the state sales tax in his first two-year budget proposal. He has left the door open for the last two years of his term.

McCrory opposed increasing the sales tax from the start. He has pledged not to increase the sales tax if elected.

RULING: It’s worth noting that Dalton and McCrory have supported tax hikes in their past but McCrory’s statement is specific to the sales-tax plan. McCrory is correct that Dalton supported a state sales-tax hike earlier this year.

SALARY CUTS

CLAIM: “Three times when I was in the N.C. Senate, and as lieutenant governor, I took a voluntary cut in pay to empathize with state employees because I think if they are suffering you have to lead by example. At the height of the financial collapse in Charlotte, when unemployment was at its highest, the mayor took at 19 percent pay raise.”

SPEAKER: Democratic candidate Walter Dalton

CONTEXT: In making a point about leadership during the debate, Dalton makes two claims: one about his salary and one about McCrory’s record. Both need context.

Dalton cites three times he took a voluntary pay cut. The first is a bill he co-sponsored as a state senator in 2002 to cut lawmakers’ part-time salaries by 5 percent. The proposal went nowhere. But Dalton took the unusual step of signing a waiver to cut his $20,659 state Senate pay by 5 percent for one year, a $348.78 return to the state. In 2009, he took a voluntary 10-hour furlough, which amounted to a 0.5 percent pay cut, after Perdue ordered the same for state employees.

In 2012, Dalton declined a 1.2 percent pay increase given to all state employees.

What Dalton doesn’t mention is that he twice voted to increase the pay of the lieutenant governor while campaigning for the job. In 2007 and 2008, he supported state budgets that increased the salary by a combined $7,900.

As for McCrory, Dalton premised his attack on the timing of the mayor’s pay hike in 2008. Was this the height of the financial collapse? Not in terms of unemployment. North Carolina’s unemployment rose steadily in 2008 but it didn’t reach its height until February 2010 at 11.4 percent. Charlotte’s unemployment didn’t peak until 2009 and 2010.

In 2008, the $1.8 billion Charlotte city budget increased the mayor’s part-time salary 19 percent to $39,900. As mayor, McCrory doesn’t get a vote on most city council matters. But he does have a budget veto – which he didn’t use. McCrory took the pay hike, even though he could have voluntarily declined it.

But as McCrory notes, in the course of his 14-year tenure, he allowed city budgets with mayoral and council salary increases to take effect but also voted against others with pay hikes.

RULING: Dalton didn’t provide full context for his claim, particularly about McCrory’s pay increase, but he gets the facts mostly correct.

STATE TAX CLIMATE

CLAIM: “The best incentive for new jobs in North Carolina ... is not to have the highest sales tax, the highest corporate tax and the highest income tax in the Southeast, which is what we have right now.”

SPEAKER: Pat McCrory

CONTEXT: McCrory compares North Carolina’s tax rates to its peers as part of his pitch to make the state more competitive and business-friendly. We will look at just the tax rates here.

McCrory defines the southeast as Georgia, South Carolina, North Carolina, Tennessee, Florida and Virginia. An ad the Republican Governors Association is running in support of McCrory makes similar claims about the state’s business climate for the South.

For the sake of our analysis, we took a broad definition of the Southeast. We looked at 14 states stretching west to Louisiana and Arkansas, south to Florida and north to Maryland and Delaware. And we used the Tax Foundation’s figures for each state.

Sales tax: North Carolina’s 4.75 percent statewide rate is the 10th highest in the region. The four states with lower rates: Louisiana, Georgia and Alabama at 4 percent; Delaware has no state sales tax.

Corporate tax: North Carolina’s 6.9 percent rate is fifth highest. The only states with greater rates: West Virginia, Louisiana, Maryland and Delaware.

Personal income tax: North Carolina’s 7.75 percent tax rate for the top bracket is the highest in the Southeast. The next highest states are Arkansas and South Carolina, tied at 7 percent.

A disclaimer: It’s difficult to make exact comparisons because each state’s rates are leveled differently, with differing income brackets and exemptions from sales tax for some purchases.

RULING: McCrory uses a tighter definition and by his measure, he’s correct. But by a broader analysis at our regional competitors our measure, he gets it right one out of three times. Staff writer Austin Baird contributed to this report.

Frank: 919-829-4698

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