Earlier today, the House Government Committee passed House Bill 274, Taxpayer Bill of Rights, by 22-14 vote, sending it to the Finance Committee.
North Carolina’s version of TABOR would, with the beginning of the 2015-16 fiscal cycle, cap state General Fund spending and limit increases to the rate of inflation and population growth. If revenues exceed the spending cap, they would be set aside as reserves, with one-fourth of them collected in an Emergency Reserve Trust Fund. That trust fund could be tapped only if two-thirds of each chamber of the General Assembly approves the additional spending. If the trust fund exceeds 5 percent of the previous year’s General Fund, the balance would be refunded to taxpayers.
Bill sponsor Rep. John Blust, R-Guilford, introduced the measure. Testifying on behalf of the bill was Becki Gray, the John Locke Foundation’s vice president for outreach, who pointed out that JLF has supported a TABOR amendment throughout its 23-year history. (A chapter of the recent JLF book First in Freedom discussed TABOR.) Also speaking for the bill was Dallas Woodhouse, state director of Americans for Prosperity.
Speaking against the bill were a representative of the left-leaning Budget and Tax Center and Deputy State Treasurer Vance Holloman.
During discussion among the committee members, Rep. Alma Adams, R-Guilford, asked how emergency reserves in excess of the 5 percent threshold would be refunded to taxpayers. Blust said he wasn’t sure, but that it’s not even been a possibility in recent years and it “would be a good problem to have.” She also wondered if excess reserves could be spent on programs rather than returned to taxpayers. Blust noted that the amendment gives the General Assembly authority to spend excess reserves at any time, but it must get a 2/3 majority of both houses before doing so.
If the measure gets approval of 60-percent majorities in the House and the Senate, it would go to voters next year as a constitutional amendment.
