Meeting

Report

 
TOM ROSS
NC Tax System
Needs Overhaul
By: Henry Bostic

The head of the Governor's Commission to Modernize State Finances told Charlotte Rotarians that “tax reform is the most important issue facing North Carolina” and the state’s future rests on a “willingness to tackle” this tough issue. Foundation executive Tom Ross said at issue is not whether to raise or lower taxes, but to adjust the structure of the tax system to match changes in the state’s economy to ensure there will be adequate revenues to pay for needed services. And he cautioned that modifying the tax structure should not be an excuse to hide tax cuts or increases. The process must be transparent to be accepted.
 
The former superior court judge outlined six key goals the commission adopted as it began its work. A new revenue system should strive for equity, competitiveness, sufficiency, simplicity, and efficiency and should provide state and local governments the tools they need to raise revenue to meet the public's needs. The commission began its work in January of 2003 and gave its report to the governor and General Assembly in December 2003 and this month respectively.
 
Ross said there are key considerations to keep in mind when studying the state’s tax system. First of all, N. C. state government provides more services than most states so comparisons with other taxes at the state and local level are often deceiving. North Carolina centralized many state services such as public school and court funding during the depression. When differences are noted, state and local taxes here remain among the lowest in the nation.
The former head of the North Carolina court system said a reformed tax system must accommodate for the growth in the service economy and sales taxes should take into account the growth of Internet sales.
 
The dramatic escalation in Medicaid costs requires the state to seriously consider taking over full responsibility for the program. The cost to counties, especially small, rural and economically depressed one, is overwhelming. The same consideration should also be given to who pays for new school and courthouse construction, a cost not borne by counties.
 
The executive director of the Z. Smith Reynolds Foundation in Winston-Salem said the commission he headed found compelling reasons to recommend changes in the state’s tax structure.
 

We need to eliminate different rates for similar activities. For example, sales taxes on movies vary from one to seven percent depending on whether it's movie ticket, cable broadcast or video rental being taxed. The tax base needs to be broadened to include services as the state’s economy moves from manufacturing and agriculture to services. The state should become part of the “streamlined sales tax agreement” to tax Internet sales now exempt. Where possible, state and federal tax provisions should be synchronized for clarity. One third of the state’s three million tax filers have taxable incomes less than $10,000. Should the state forgo that 3 percent of revenue because of all the costs associated with collection or consider an earned income tax credit? Corporate exemptions should be uniform. Is it right, he asked, for a business moving to the state to receive tax credits for creating jobs when a local enterprise in the same business already in the state receives no tax credit? Tax incentives for research and development “pay off and should be retained.” Franchise taxes should be modernized. Allow combined tax filings for the same business entity.

Ross said the commission he headed included Republicans and Democrats, liberals and conservatives, tax experts and people in and out of government. He noted that they agreed on several key points.
 

Medicaid support should be a “total state responsibility.” Many counties simply cannot afford the program. The state should look seriously at how school and courthouse construction is funded for the same reasons. The state “must maintain a healthy rainy day fund” by squirreling away about eight percent or more of a current budget each cycle. Tax cuts should “never be permanent” because state finances follow business cycles. There are good years and bad years. Excess revenues in good years should be “returned to taxpayers through rebates” and not through permanent tax cuts. We don’t know enough about the future to make any tax cut permanent, he said.

In other business, Junior Achievement executive Phil Volponi thanked the club for its support of JA new Exchange City in the Center City. Merry Oaks fourth grader Dejah Gilliam explained how the program worked and also thanked the club for its support of the project. Her mother Sophia Jackson accompanied her.
 
Gregg Walker, who just joined the Music Committee, led the club in singing Woodie Guthrie’s This Land is Your Land including a new verse Greg wrote about North Carolina.
    
Head Table:
Jan Thompson, Jim Adams, Ed Kizer, Tom Robertson, Jerry Blanchard, Tom Bartholomy
 
Visitors and Guests:
Lee Morris; Visitors & Guests: Tom Burgess, Health & Happiness: Worth Williamson; Song: Gregg Walker
 
 

*    *    *

CART Fund

The CART Fund is dedicated to helping find a cure for Alzheimer’s disease by providing significant funds for research. (CART stands for Coins for Alzheimer’s Research Trust.) The idea of the CART Fund, which was developed in the Sumter Rotary Club in 1995, soon spread throughout the 75 clubs in District 7770 and was later adopted by all the District’s clubs in 1996. In 1999, a goal was set to get the other ten districts in North Carolina, South Carolina and Georgia to join the effort. This was accomplished in July 2000. A total of $850,000 in grants has been awarded to the nation’s top research universities since 2001.   Rotary clubs have been asked to set a CART bucket at some convenient location where members can volunteer to take coins from their pockets or purses and drop them into the bucket as they enter or exit meetings. The Rotary Club of Charlotte will join the 41 clubs already participating in District 7680 in this effort. If you would like additional information on this District project, please contact the Rotary office.

Attendance Record 1/20/04 1/21/03 visitors & guests 14 19 club members 210 197 total attendance 224 216 Wedding Anniversaries 29 Margie and Harry Daugherty 02 Ann and Don Carmichael 02 Judith and Bill Underwood     New Members  |  Resignations Alan Adler Mary John Dye John Luby Townley Moon Jeff Wise   Roaming Rotarians Bijoy Sahoo – Cuttack, India Bijoy Sahoo – Monroe, NC Kurt Waldthausen –      Stuttgart, Germany Susan Patterson –      Siracusa, Sicily Birthdays and Birthplaces 28 Bert Voswinkel,      Augsbury, Germany 31 Jamie McLawhorn,       Hookerton, NC 01 Michele Matthews,      Washington, DC 01 Dee Milligan,      Philadelphia, PA 02 Rock Miralia, New York, NY

Click here for photos of this Meeting