Republican Legislative Leaders Want to Give Millions of N.C. Taxpayers a Refund | Eastern North Carolina Now

Publisher's note: This post appears here courtesy of the Carolina Journal, and written by Lindsay Marchello.


    North Carolina taxpayers could get a check from the state by late November.

    General Assembly leaders in a news conference announced a plan to return to taxpayers money from the $900-million surplus.

    Income-tax payments and sales tax collections ran higher than expected. Lawmakers were tasked with deciding what to do with the windfall, with ideas such as putting the money in savings or refunding it to taxpayers.

    House Speaker Tim Moore, R-Cleveland, and Senate leader Phil Berger, R-Rockingham, decided a refund was best.

    "My experience is you spend the money better than the government does," Moore said. "We propose to send that surplus back to the people who earned it."

    Moore and Berger said Wednesday, Aug. 21, that a bill will be introduced soon outlining the Taxpayer Refund Act, which would base refunds on how much filers paid in state taxes. Berger said individuals could see a maximum of $125, and couples could get as much as $250.

    About $680 million will cover the refunds and the cost of sending checks. The rest of the surplus will go to the Rainy Day Fund. Berger and Moore said more than 5.1 million taxpayers will receive a refund, with more than 90% getting the maximum amount. Roughly 350,000 taxpayers would get back all the state income taxes they paid last year.

    "Tax revenues don't belong to the government, they belong to the people who earned it," Berger said. "Refunding up to $250 means a lot to a family that's living paycheck-to-paycheck. We collected more money than was needed, so we're giving it back."

    Berger said the Senate Finance Committee will take up the measure Thursday and expected a floor vote early next week.

    Joseph Coletti, a senior fellow at the John Locke Foundation, said there are three good ways to deal with one-time money like the surplus - put it into savings, spend it on capital, or return it to taxpayers. Coletti said the money shouldn't go toward something that would create an ongoing expectation of state spending.

    "Arguably, the best use of the surplus, as with any one-time bonus, would be to save it so North Carolinians do not face higher taxes and fewer services during the next recession," Coletti said. "Saving money would also leave open the possibility of reaching an agreement on a budget plan for the current year."

    While Coletti would prefer the money go into savings to address unfunded obligations and replenish the rainy day fund, he doesn't blame legislative leaders for opting to return some of the money, especially since the state budget isn't in place.

    Gov. Roy Cooper vetoed the $24 billion General Fund budget June 28, and has since been locked in a stalemate with the General Assembly. Cooper and Democratic lawmakers want Medicaid expansion in the budget. Republican leaders oppose expanding the program. The budget includes a provision calling for a special session to discuss health-care reforms separately.

    Moore said negotiations over a budget compromise could begin if Cooper drops his ultimatum on Medicaid expansion.

    "Offering a refund to taxpayers, which could be thought of as a dividend for their investment in state government, would accept the steadfast demands of House Democrats and Gov. Cooper for Medicaid expansion at face value," Coletti said. "Maybe an offer to refund taxpayers is just the kick needed to get things going."