Gov. Pat McCrory and Republican legislative leaders plan to debut a consensus plan Monday to cut state income taxes.
The GOP leaders will announce the details at a 4 p.m. event at the Old Capitol. The specifics remain unknown but the agreement is expected to trim personal and corporate income taxes, though not eliminate them entirely as GOP leaders had hoped.
The agreement would end a weeks-long deadlock that threatened the GOP’s top legislative priority.
McCrory and legislative leaders bickered about how much to cut taxes as part of a larger debate about the size of government. The Senate wanted to go the furthest, proposing to phase out the state’s 6.9 percent corporate tax as part of a plan that would reduce state revenues by $1 billion a year at full implementation. The governor worried that it would cut too deeply into state spending and House lawmakers proposed a plan that cut state revenues half as much.
But even with the accord, it remains an open question as to whether it satisfies Republicans’ pledge to reform the state’s tax code.
GOP lawmakers original proposals significantly expanded the sales tax to cover new services – a key component to balancing the system – but the effort met stiff resistance. The broad plan first introduced in the Senate drew praise from national tea party groups who fight for lower taxes.
The latest bills traded by House and Senate leaders more closely resemble a tax cut not entirely offset by new revenues. Democrats argue now is the wrong time for a tax cut because the budget remains tight and state services are still being slashed.