BRADENTON, Fla. - A taxpayer bill of rights passed by the North Carolina Senate Finance Committee could threaten the state's coveted gilt-edged ratings, according to State Treasurer Janet Cowell, who said she opposes the newly surfaced legislation.
The Finance Committee adopted a revised version of Senate Bill 607 on Thursday that would require two-thirds of legislators to vote affirmatively to increase the state's personal income tax rate above 5%.
The bill would also tie state spending to inflation plus growth in the population, and create an emergency savings reserve fund, both of which would also require two-thirds of legislators to vote affirmatively in order to make changes in the requirements.
SB 607, sponsored by five Republicans, would require a constitutional amendment to be approved by voters on the March 15, 2016, ballot in order to become effective.
"North Carolina has a long history of responsible fiscal management as evidenced by our status as one of only 10 states in the nation with a AAA rating from all three rating agencies," Cowell, a Democrat, told legislators in an Aug. 7 letter.
"The passage of the constitutional amendment tax legislation poses real danger to our finances and reputation," Cowell said.
Cowell also told lawmakers that the amendment, if passed, would limit the state's financial and budget flexibility and potentially increase financing costs.
She said similar TABOR measures, such as Colorado's "Taxpayer's Bill of Rights," have hindered the ability of lawmakers to react quickly to disasters and other fiscal needs.
The state's finances and reputation are endangered by "irresponsible politicians who tax and spend beyond our means and who rack up too much debt," said a joint statement released to the News Observer by Senate Finance Committee co-chairmen Sen. Brent Jackson, R-Sampson County, and Sen. Bob Rucho, R- Mecklenburg County.
The statement said that SB 607 is designed to keep politicians from conducting "wild spending sprees" and would ultimately protect the state's fiscal health.
One of the major obstacles that continues to prevent lawmakers in both chambers from agreeing on a fiscal 2016 budget is a proposal by Gov. Pat McCrory for North Carolina to issue $3 billion of general obligation bonds to finance transportation and state infrastructure projects.
On Thursday, the House voted for a $2.85 billion GO bond package and sent the measure to the Senate. Voters would have to approve the issuance of any GO bonds if legislators come to agreement over the bond issue.
The North Carolina Legislature is in an extended session this year, largely because the House and Senate have failed to reach agreement on a budget for the fiscal year that started July 1.
A continuing budget resolution to keep government functioning expires Friday, unless extended.
