Legislative Republicans are acting as though their days are numbered.
Having remade the state’s fiscal structure in their own likeness, Republicans are now looking to lock in their personal income tax rates with a constitutional amendment and their flush savings reserve, a.k.a. the Rainy Day Fund, with statutory funding requirements and draw-down limits.
If they expect to keep winning elections, and thus to stay in power, it’s odd that they would impose such restrictive measures on themselves.
This is especially so considering the state’s current political game board. Republicans have veto-proof majorities in both houses and a legislative-district map that promises to keep returning those lopsided advantages in 2018 and 2020, after which they can gerrymander again.
Yes, they might have concerns the federal courts will rule their voter-ID law and gerrymandered districts unconstitutional, but such decisions would only be temporary once the high court is safely in conservative hands again.
In short, it appears that any Republican concern of a return to Democratic rule in North Carolina seems a half-century premature.
As many good parents have advised their children, however, “plan for all eventualities and be prepared for the worst.”
With the personal income tax now at 5.499 percent, a 5.5 percent constitutional cap would not change anything immediately. But this cap would be almost impossible to raise in the future. Not many people vote to raise their own taxes.
A capped income tax does not, however, mean Republicans can’t, and won’t, raise our taxes. They could cut the standard deduction or reduce deductible items like home-mortgage interest. They might repeal tax credits.
They could also raise other taxes. The sales tax is the most likely. It now stands at 6.75 percent statewide with numerous local add-ons allowed. In recent years, as legislators have cut the personal income tax, they’ve expanded the items on which we pay sales tax. For example, we now pay sales tax on entertainment tickets and auto-repair labor.
Similarly, the House bill that would require a steady flow of money into the reserve fund and limit what can be withdrawn does not assure steady growth of that savings account.
The House bill presumes to place statutory limits on future sessions of the General Assembly, and such a presumption is meaningless. A future legislature need only pass a bill that contradicts this statute, and the newer law would apply.
So the constitutional amendment that would cap personal income taxes wouldn’t guarantee that, overall, your taxes wouldn’t go up, just that your income tax rate wouldn’t go up. And the savings-reserve bill wouldn’t guarantee a steady increase in the Rainy Day Fund either.
So what would these two initiatives guarantee?
They’d guarantee that Republican politicians could go before voters in 2018 and 2020 and pronounce that they’d guaranteed that taxes won’t rise and that state reserves will.
So while legislative Republicans might not have much to worry about until 2075, they’re assuring they have something to take before the voters next year, even if it is more mirage than material.
Paul T. O’Connor has covered state government for 39 years.