Valentine's Day Legislative Update 2/13/15
By Unknown
Welcome to the Valentine’s Day edition of
Legislative Update
(not to be confused with the Friday the 13th
edition).
So far in 2015 one member abandoned the Democratic caucus,
several high
ranking Republican committee chairs have been demoted, red velvet ropes keep your Government Relations Team at arm’s length
from anyone we may hug or hit, and Moral Monday demonstrations
now happen every day of the week. In short, there is no love!
But we love love.
So we scoured the NC statutes and are pleased to report that
we do, indeed, have “love” in North Carolina – in fact “love”
appears seven times – in license plates that proclaim our love for animals,
the state song, salute to the state flag, adoptions, and the statute
differentiating types of bail bonds.
We also looked up “hate”.
The result: Love = 7. Hate = 0. Not bad.
The General Assembly has still not hit its stride.
Several weeks into the 2015 session and we have very little bill movement and
very few committee hearings. March contains bill introduction deadlines so we
expect the pace to pick up.
This week we learned from economists at
the Legislature that currently revenues continue to lag behind projections.
Chief Economist Barry Boardman expects a $271 million shortfall in the
current year budget. Republicans suggest April tax filings may help while
Democrats complain that the recent tax cuts are deeper than originally
thought.
Are Senate Republicans Raising Taxes?
Senate
Bill 20,
filed in the Senate as an Internal Revenue Code update bill, rolled out with
a surprise new “Part II” that deals with motor fuel tax changes. We pay the
motor fuels tax at the pump with every fuel purchase. The rate of that tax is
adjusted every 6 months, according to the price of fuel – if fuel is up, the
rate goes up; if fuel is down, the rate goes down. This new section proposes
a 2.5 cent cut in the state’s gas tax and adds a new minimum rate floor that
would keep it from falling even lower. In June, however, the gas tax is
expected to go lower than the proposed minimum rate floor, so the tax
reduction included in the bill would ultimately have the effect of being a
tax increase later this year. Supporters of the bill argue a minimum rate is
necessary to ensure the Department of Transportation’s primary revenue source
is less volatile and more reliable, in order to keep up with both the need to
repair roads and the growing economy. Under current law, the formula sets the
tax as the sum of 17.5 cents plus either 3.5 cents or 7% of the average
wholesale price, whichever is greater. The new legislation would change the
formula, setting the tax at 17.5 cents plus either an additional 17.5 cents
or 9.9% of the average wholesale fuel price, whichever is greater. The bill
passed the Senate on Thursday, but we’re hearing House Leadership doesn’t
agree with the tax reduction talking points. Stay tuned.
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