Under the Dome

NC House Republicans divided on budget provisions

The N.C. House’s first vote Monday on its proposed budget likely split a little closer than Republican budget writers might have hoped.

The budget’s tax and fee section passed the House Finance Committee in a 19-16 vote, with a number of Republicans voting no. The panel voted by a show of hands, so there’s no formal record of how each legislator voted.

But House Majority Leader Mike Hager was among the hands in the air when the chairman called for opposition votes. And the House Rules Chairman, David Lewis, took photos of the vote on his cell phone, possibly so the House GOP leadership would know who was in the “no” category.

With such a close margin, it’s likely that the Democrats who voted yes were crucial to getting the package passed.

While critiques of the budget during Monday’s meeting were mostly limited to a few Democrats who suggested that more education spending is needed, Republican Rep. Bert Jones of Reidsville touched on his party’s apparent divide.

Jones – among the legislators who voted no – said the extension of tax credits for specific industries amounts to “unraveling tax reform” passed several years ago to simplify the tax code and allow for a lower overall rate.

The budget would extend tax credits for solar and other renewable energy projects, technology data centers and research and development. It would also create a new tax break aimed at airlines, allowing them to avoid sales taxes on aircraft service contracts starting in 2017.

Republican opponents of the tax credits will have company in the Senate, where several leaders have also criticized the programs.

Supporters of the credits argue that sought-after industries might leave the state without them. In the House budget, they’re part of a $158 million economic development package, senior budget chairman Nelson Dollar said.

After Monday’s meeting, Dollar downplayed the close vote. “I think we’ll be in good shape as this bill moves forward,” he said.

The next budget vote is expected to come late Tuesday afternoon or evening in the House Appropriations Committee.