N.C. is obliged to give back

There are two basic types of people in the world: stand-up folks who honor their word and obligations, and deadbeats who don't. Soon we'll learn which type prevails at the General Assembly.

One of the hidden powers of money is its ability to reveal a person's true character. Lend a stand-up guy a few bucks and he'll be at your door with repayment in hand soon his next check comes in. Stand-up people repay their debts out of gratitude as much as obligation. If the table is turned and hard times hit you, they'll share whatever they have, regardless how little it is.

A deadbeat has to be reminded of his promise to repay, and, when cornered, often cites a litany of expenses that prevent even a partial payment. Don't even think about asking deadbeats for help. They're all about taking, even when flush. Giving back repulses them.

Keep this distinction in mind when legislators return to Raleigh on May 9.

Preliminary estimates show there will be a state budget surplus of between $1 billion and $1.5 billion. Yet, we're being told the money is needed to fatten the budgets and wallets of educators, repair neglected buildings and replenish the rainy day fund.

As House Speaker Jim Black told Gary D. Robertson of The Associated Press last week, "For an extra $1 billion, there will be about $10 billion in requests."

Mr. Speaker, any stand-up guy will tell you there's a mighty big difference between requests and commitments. In 2001, the General Assembly turned to the taxpayer for a temporary half-cent sales tax increase to get the state through rough economic times. While a half-cent sounds small, it was actually a 12.5 percent increase. Worse, the two-year temporary tax is now five years old. Before any new money is spent, the General Assembly should honor its word and restore the state sales tax to 4 percent.

Legislators should also abolish the temporary 8.25 percent personal tax bracket for joint-filers with $200,000 or more in taxable income. Positioned as a levy on the rich, in reality this is a heavy tax on small businesses, which are the economy's primary job creators. Some North Carolina small businesses are taxed at this high temporary rate. It needs to be reduced. At the very least, it should revert to 7.75 percent, the top rate before the soak-the-rich bracket was created.

These "temporary" taxes must be repealed soon, because the emotion-laden gasoline tax threatens to suck all the fiscal oxygen out of this legislative session.

• • •

Kitchen table projections tell me the variable portion of the tariff, which is based on the wholesale price of fuel, threatens to bump the pump tax to between 32 and 34 cents a gallon after July 1. If my math is right, North Carolina would have one of the five highest state motor fuel taxes in the nation.

Representatives of Gov. Mike Easley and Senate President Pro Tem Marc Basnight told me last week that there are no plans to reduce the gas tax. However, Julie Robinson of Speaker Black's office said House members are kicking around some ideas for a reduction.

Republicans are going to press the issue, which will force the Democrats to do more than blame President Bush for high oil prices. Senate Republican Leader Phil Berger told me he'll probably reintroduce legislation that would roll back the current 29.9 cent per gallon state tax to the July 2005 level, 27.7 cents.

(New York currently has the highest state tax, at 45.77 cents per gallon.)

Berger is also looking at legislation to stop the transfer of roughly $250 million per year from the highway trust fund to the general fund. Although the transfer is in accordance with the law that created the highway trust fund, the money switch is misleading to taxpayers. When motorists pay what essentially is a use tax at the pump, they expect that money to be used on roads, not pork projects like the Sparta teapot museum.

Rolling back taxes on gas, personal income and retail purchases during the current time of plenty should be the General Assembly's top priority. If the state is going to dig deeper into taxpayers' pockets during rough economic times, it's only right to provide tax relief during good times.

Having $1 billion in spare taxes definitely qualifies as good times.