Taxpayer Bill of Rights Moving Ahead
By Timothy Wilson
Currently working its way through the North Carolina House Committees is House Bill 274 – the Taxpayer Bill of Rights (TABOR) – which would bring significant reform to the state budget process by providing government accountability and protection to taxpayers.
TABOR is a state constitutional amendment that caps the state General Fund spending and also limits the growth rate of the state budget starting in the 2015-16 fiscal year.
These limits are calculated through a formula based on the state’s inflation rate and population growth. For instance, if the state’s inflation rate in 2014 is 3 percent and the population grows by 2 percent, then state spending could only increase by 5 percent for the following 2015-16 fiscal year.
If the North Carolina General Assembly wanted to spend past this cap, however, TABOR requires a two-thirds vote from both the State House and Senate before that would be possible.
Additionally, the bill stipulates that revenues exceeding the state budget cap at the end of the fiscal year be credited to an emergency reserve trust fund, more commonly referred to as a “rainy day” fund.
The great news for North Carolina taxpayers is that TABOR requires that funds exceeding 5 percent of the emergency reserves be used as tax relief for taxpayers.
The TABOR bill still has to move through two more State House Committees and of course be passed in both the House and Senate before taxpayers have their chance to vote it into the state constitution in 2014.
At the House Finance Committee meeting Dallas Woodhouse, state director for AFP-North Carolina, said other states have used TABOR with real impact.
“It doesn’t slash spending at all,” Woodhouse said. “Rather, it places a reasonable limit on how fast government can grow.”
And anything that places limits on government growth will ensure continued economic freedom for taxpayers.