RALEIGH, N.C. (WNCN) – As gas prices continue to climb, Democrats tried to build support Thursday for their plan to send drivers a check for $200, utilizing a portion of North Carolina’s surplus money.
Under the Democrats’ proposal, every adult with a valid North Carolina driver’s license as of March 31 would receive that payment.
Democrats would use $1.3 billion of the state’s surplus money to pay for it. The surplus has an anticipated total of about $6.2 billion this year and next year.
“We need targeted tax incentives that put money in people’s pockets and people who need it the most and we need to do it now,” Sen. Dan Blue (D-Wake County) said.
Republican leaders in the General Assembly have not unveiled their plans yet for the surplus and other changes they want to make to the state budget for the next fiscal year, that begins July 1.
Senate leader Phil Berger (R-Rockingham) said Thursday he hasn’t ruled out the idea of a rebate but thinks cutting the personal income tax rate would be better.
“Personally, I would like to see something that’s a little more broad-based and long-lasting as opposed to a temporary thing that may help with one tank of gas,” he said.
As part of the budget the General Assembly passed late last year, and that Gov. Roy Cooper (D) signed, the income tax rate fell this year to 4.99 percent. It will continue to fall each year until 2027 when it will reach 3.99 percent.
Sen. Berger said he would like to accelerate that timeline.
Gov. Cooper did not include any tax cuts or rebates in his budget proposal, that he unveiled last month. A spokesperson for him said he is open to considering the rebate Senate Democrats proposed.
Sen. Blue said he thinks cutting the income tax rate would not have the same effect as sending out a one-time payment.
“That’s setting us up for more problems two, three, four years from now,” he said. “Sweeping income tax reductions for everyone, particularly CEOs and the wealthy, won’t do the most good for working people.”
The average price for a gallon of regular unleaded gas hit a new high Thursday of $4.39 in North Carolina, according to AAA. That’s three cents higher than the week before and $1.50 higher than one year ago.
Republican legislative leaders said they are still negotiating among themselves what changes to make to the budget and plan to unveil that in the next three weeks. They also said they are aiming to end the current session by July 1. Sen. Berger indicated that could be with no budget agreement.
CBS 17 asked Sen. Berger, “Are you all prepared to leave here having done absolutely nothing with the surplus money?”
He replied, “If we’re unable to pass legislation, I would say that we would be in good shape whether we pass a budget or not.”
He noted the current two-year budget already includes two-and-a-half percent raises next fiscal year for most state workers and teachers, but Democrats said those raises need to be higher in light of the rate of inflation.