Morning Memo: Tax Day spin, dueling views of tax reform bill

Posted by John Frank on April 15, 2014 

Gov. Pat McCrory will use April 15 to trumpet a new report that suggests the state’s economic outlook is among the best in the nation because of the major tax cut measure he signed into law last year.

But it will also put him shoulder-to-shoulder with the controversial American Legislative Exchange Council, a national conservative organization that drafts model legislation and helped push the bill in North Carolina.

ALEC’s latest “Rich States, Poor States” report shows North Carolina ranks No. 6 for its 2014 economic outlook, up from No. 22 a year ago. The report’s authors said Monday it represented one of the largest jumps in the nation and the tax overhaul is the reason. It is the first time the state made the top 10 in the report’s seven year history.

Republican lawmakers approved legislation, signed by the governor in July, to eliminate the state’s three-tiered personal income tax rates and create a flat tax at 5.8 percent in 2014 and 5.75 percent in 2015. The corporate tax rate falls from 6.9 percent to 6 percent in 2014 and 5 percent in 2015 and the estate tax was eliminated.

“This is a monumental one-year leap in economic competitiveness, but unsurprising due to the tremendous tax reform the state accomplished in 2013,” said Jonathan Williams in a statement. He is a co-author of the “Rich States, Poor States” report.

The Washington-based ALEC advocates for the elimination of personal income taxes, lower tax burdens and legislation that bans collective bargaining. House Speaker Thom Tillis and Rep. Tim Moffitt of Asheville are on the group’s national board of directors. But the business-backed group’s role creating “model legislation,” often written by major corporations who donate to ALEC, and its ties to the “Stand Your Ground” law in the Trayvon Martin case, make it a lightning rod for critics.

The tax legislation also is coming under scrutiny because it is projected to cut $2 billion from the state budget in the next five years, just as state lawmakers say limited revenues mean only modest pay hikes for teachers, whose average salary ranks among the worst in the nation.

Critics of the GOP tax law will hold their own event at 10:30 a.m. Tuesday to highlight how the wealthy will receive the largest tax breaks under the changes and low income families could see a tax hike. The event is sponsored by the Budget & Tax Center, MomsRising NC, League of Women Voters and others at the legislative building auditorium.

***Get more details on the ALEC press conference and more North Carolina political news below in the Dome Morning Memo. ***

TODAY IN POLITICS: Gov. Pat McCrory will mark Tax Day with a press conference scheduled for 2 p.m. at the Doubletree Brownstone Inn in Raleigh. His public schedule does not mention the ALEC event as the purpose but ALEC announced Monday that its officials would travel to the state and join McCrory.

Four legislative committee meetings will add to the action at the statehouse today. The committee looking at the state’s certificate of need laws relating to hospitals will meet at 9 a.m. in room 643 LOB. The Lottery Oversight Committee meets at 10 a.m. in room 415 LOB to hear Speaker Pro Tem Paul “Skip” Stam’s bill that would tighten controls on the state games. The committee looking at a of couple military issues will meet at 10 a.m. in room 544 LOB. And the foster care committee meets at 2 p.m. in room 414 LOB.

GIMMICK ALERT: Stam – in an attempt to get reporters to pay attention to his lottery transparency report, a well-worn bone for him – included this note on the press release Monday: “NOTE: There is a Grand Prize for the reporter who finds Waldo in the first PowerPoint attached.”

#NCSEN –

THE GREG BRANNON PROFILE: Greg Brannon’s Monday started with two pelvic surgeries at WakeMed and ended at a tea party event in Moore County for his U.S Senate campaign.

In between, the 53-year-old obstetrician saw 46 patients at his Cary office.

Brannon has no political experience. He recently lost a civil lawsuit. And he’s facing seven other candidates, including state House Speaker Thom Tillis, whose supporters have deep pockets, in the Republican primary.

But he thinks he has the managerial experience and legal knowledge needed to win the primary and ultimately unseat incumbent Democrat Kay Hagan.

He’s run his OB/GYN practice for 21 years, served as medical director for a local pregnancy clinic for eight years and worked at a weight-loss clinic for two years – all while raising seven children, three of whom are adopted. Read more here.

BRANNON DELCINED TO ANSWER QUESTIONS ON VIDEO: Even as he attacks House Speaker Thom Tillis for skipping GOP forums on the Senate campaign trail, Brannon declined numerous attempts to video him answering three basic questions as part of his profile, with his campaign citing his busy schedule as the reason. The questions are part of an effort to educate voters about the candidates’ key positions and others have willingly complied.

The three questions Brannon wouldn’t answer on video: his alternative plan to the Affordable Care Act; whether he supports any form of legal status for illegal immigrants; and his solutions for reducing the nation’s deficit.

He did, however, provide the answers for print. Here they are:

What is your alternative to the Affordable Care Act:

Brannon said the free markets should dictate healthcare costs. He doesn’t think states should limit the number of insurance companies in their market.

“Let the commerce clause do what it’s supposed to do,” he said.

Do you support a plan to grant any form of legal status to immigrants who have entered the country illegally?

Brannon said he doesn’t support amnesty. He supports citizenship only for immigrants who go through the process legally.

How would you cut the deficit and by how much would it decrease under your plan?

“We need a real dollar again,” he said. “In the Constitution it says it must be backed by gold and silver.”

“A real dollar would help inflation, which is the killer of all ... the worst tax of all.”

A GUIDE TO THE NATIONAL PRIMARIES: Politico Magazine’s 11 days to November. Read it here.

#NCPOL –

THE (MEH) BIG STORY – TEACHER PAY TASK FORCE RECOMMENDS ... ANOTHER STUDY: Several educators and legislators on a General Assembly task force were cool Monday to their own panel’s recommendations for overhauling public school teacher compensation, which included few specific actions and asked for another study.

The final report of the Educator Effectiveness and Compensation Task Force lacked a detailed road map on how to improve salaries for all educators and evaluate teacher performance to reward the best instructors.

Instead, the report offered almost a dozen findings and four goals, which included raising early-career teacher salaries significantly in the short term and all teacher pay in the long term while modernizing the compensation system. The task force also asked the legislature to pass a law telling the State Board of Education to come up with a detailed compensation system proposal by next March 15. Read more here.

RELATED: File this in the category of Johnny-come-latelys: Wake Commissioners may ask for North Carolina to raise teacher pay. Read more here.

IF JOHN EDWARDS IS YOUR LAWYER, DOES IT HELP OR HURT? From columnist Barry Saunders: Social scientists – OK, maybe just I – call it the “Johnnie Cochran Phenomenon.”

After attorney Cochran helped O.J. Simpson become the first person in the world to skate on a murder charge – I know: He really wasn’t, but you’d have thought he was the first person to get away with murder, judging by the vituperation that resulted – Cochran became even more hated than his ex-jock client.

Whatever you call that phenomenon, John Edwards is now being beat upside the head with it. Read more here.

QUICK HEADLINES –

NC Supreme Court hears arguments in Racial Justice Act cases. Read more here.

Often lampooning North Carolina and national politics, Charlotte Observer editorial cartoonist Kevin Siers wins a Pulitzer Prize. Read more here.

Story to watch: Charlotte police poised to buy body cameras. Read more here.

Mitchell drops out of race to replace Watt. Read more here.

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