Proposed constitutional amendment would give North Carolina taxpayers control of state spending
(The Center Square) – An amendment to the North Carolina Constitution that would allow voters to decide whether they should have more control over state spending has been introduced in the General Assembly.
Senate Bill 717, dubbed the Taxpayer Bill of Rights, would place caps on government spending, require yearly deposits into state reserves, return surpluses to taxpayers and require voters’ approval for tax increases.
Proponents of the bill said it is meant to protect North Carolina taxpayers.
“SB 717 Taxpayer Bill of Rights is a proposed [North Carolina] constitutional amendment seeking to limit the growth of government and protect taxpayers,” tweeted Sen. Paul Newton, R-Cabarrus, one of the bill’s main sponsors.
The bill, also sponsored by Sens. Bill Rabon, R-Brunswick, and Warren Daniel, R-Burke, must be approved by the Senate and House by a three-fifths majority before it is placed on the ballot.
SB 717 would limit annual spending increases to no more than the “average inflation growth for the prior three calendar years plus the average growth in state population for the prior three calendar years before the fiscal year start.” If there is a surplus, the money would be refunded to taxpayers under the measure.
Inflation growth refers to the level prices rise in the country. General Fund spending in fiscal year 2021-22 could increase no more than $1.7 billion with the inflation and population growth formula since fiscal year 2018-19, said Joe Colleti, a senior fellow at the John Locke Foundation.
The amendment also would require lawmakers to transfer 15% of each fiscal year’s estimated tax revenue growth to the state’s savings reserve, as long as the transfer does not cause the reserve’s balance to be 15% more than the General Fund’s balance. Then the excess funds would be transferred to the Unfunded Liability Solvency Reserve.
The General Assembly would have the ability to override the spending limit and the transfers with a three-fifths majority vote, according to the bill.
The measure also would prohibit the state and local governments from increasing taxes without a majority vote from voters.
According to a recent survey conducted by Cygnal for the John Locke Foundation, 59% of the North Carolinians surveyed said they would support a state constitutional amendment that would require voter approval for taxes, expenditure caps and regular deposits into the state’s reserves.
John Locke Foundation CEO Amy Cooke said if the amendment passes, it would be the “greatest gift” North Carolinians could give themselves.
“Keeping government spending in check is like rocket fuel for the economy as North Carolinians get to keep more of their hard-earned money and invest it in a manner of their choosing,” Cooke said.
Colorado voters have approved amendments that limit government spending. The state must follow revenue caps based on the previous fiscal year’s actual revenue or limit, population growth and inflation. Voters must approve tax and spending limit increases. Colorado voters rejected lawmakers’ effort to overturn the state’s spending limits in 2019. Critics of spending limits said they restrict the government from providing amble public services.
“[North Carolina] SB 717 would amend the state constitution to adopt a Colorado-style taxpayer’s bill of rights,” tweeted Ryan Maness, senior policy analyst and tax counsel for MultiState, a government relations company. “Almost certainly not gonna move, but still amazing that any other state lawmaker would want to follow Colorado down that road, given the grief it has caused.”
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