As state lawmakers return to wrestle with the budget deficit, the other top priority needs to be tax reform, N.C. Treasurer Janet Cowell told business leaders in Raleigh this morning.
The General Assembly should look at eliminating various exemptions and credits, while reducing the overall corporate, personal and sales tax rates by a target of 1 percent each, she said. In some cases, reform could involve increasing taxes on things such as entertainment and personal services.
"Each of us would have to sacrifice if we were to move to this plan," she said at the Greater Raleigh Chamber of Commerce's economic forecast forum.
But there isn't much choice if North Carolina is to remain financially stable and competitive with neighboring states.
"The deficit we're facing this year is directly related to our failure to modernize our tax system," she said. "As we go into the legislative session, if we come out without passing tax reform, it will have been a failure.
"I commit to being a leader on tax reform," she added.
Cowell also struck a realistic tone, noting that there have been numerous tax commissions that studied reform over the years, only to avoid any real action. "It's a strange spring ritual we seem to do every year."