Paul Fogleman,

The North Carolina Senate this week started rolling out a bill that would allow voters to determine if state spending should be limited by the constitution. The “Taxpayers Bill of Rights” legislation would cap the state income tax at 5 percent, limit state spending to the rate of population growth and inflation, and require that 2 percent of state revenue be put into a rainy day saving account until it reaches $2.5 billion.

Originally each of these proposals would have been voted on individually. But Senator Brent Jackson, the bill’s sponsor, said they will be combined into one proposal. If adopted by the legislature, the proposed constitutional amendment would be on the 2016 spring primary ballot. The bill has to be approved by the House and because it would amendment the constitution, a three-fifths of both Chambers must sign off. While this would affect future spending, the current Legislature has not moved on the current budget process.


In face of fierce opposition in the House, the Senate agreed to remove some policy issues from the budget. Instead the senators voted separate bills to redistribute sales taxes and provide funds for recruiting new business to the state. Senator Harry Brown, author of a bill to take more sales tax revenue away from point of sales for redistribution to poorer, less populated counties, retreated from taking 80 percent to 50 percent. Larger counties would lose millions of dollars which would be made up with higher property taxes. Many House members were not impressed. House and Senate budget conferees have major hurdles ahead, including layoffs of teacher assistants, revenue shifts to the backs of manufacturers, and appropriations to public education.


The Senate version of the budget raises the privilege tax on manufacturing equipment from $80 to $500 per machine. The Hosiery and Textiles Governmental Affairs Council is pushing for a repeal of this increase with help from House members. One hosiery manufacturer who recently purchased 75 new knitting machines, said the Senate proposal would have added $37,000 to the tax liability—the equivalent of one new machine.


A new cotton yarn manufacturing company is locating in Martin County, NC, in the heart of the state’s cotton-growing region. AR Textiles Ltd., an Indian firm, is receiving $114,000 in state job development funds (JDIG). The Rural Economic Dedvelopment Center gave Martin County $750,000 to make improvements to the site for the plant. Rao Palaparty, vice president of AR Ltd said the average wage will be $26,300.

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