News & Observer: McCrory Says Tax Reform Does Not Equal Tax Cuts

Under the Dome

Gov. Pat McCrory is redefining what he wants to see in a much-debated bill to overhaul the state’s tax system and it appears he’s moving in a different direction than state lawmakers.

Speaking with reporters Monday, he said he wants to limit the plan’s scope to 2015 because he doesn’t believe revenue forecasts after that date. From there, McCrory said, lawmakers can re-examine the issue based on the state’ s economic situation.

The latest version of the tax measure, approved by the Senate, calls for phasing in the changes over a five-year period.

McCrory declared in his State of the State address earlier this year that any tax bill “must be revenue-neutral.” The term typically means a bill needs keep state tax revenues flat, despite the changes.

But Monday the governor created his own definition. “My goal is to meet the budgetary requirements of state government, to me that’s the definition of revenue-neutral,” he said.

McCrory reiterated his concern that the Senate and House tax plans cut state taxes too deeply, and don’t give him enough money to pay for his priorities.

“The tax reform purpose should be to reform the tax system,” he said. “If there are other goals that legislators want to meet, regarding tax cuts in certain areas or tax increases in certain areas, then, to me, that’s a separate issue.”

Either way, the Republican chief executive is urging state lawmakers to strike a deal on tax reform soon or move on. “If not this week, it needs to happen soon because that’s delaying movement on the budget,” he told reporters Monday. “We’ve got to move one way or another.”

If the bill survived in its current form, McCrory said he would have “serious concerns about the bill because I’m not going to put the financial state in jeopardy.”

“I’d rather have no bill than a bad bill,” he added later.