Another “Major Business Tax Cut” Proposed by Those Wanting to Continue Underfunding Public Schools

Any public school advocate in North Carolina who has been actively defending our public school system knows the names of Sen. Jerry Tillman and Sen. Ralph Hise.

Tillman has been the “grandfather” of the charter school movement and has been a strong proponent of many a “reform” that has hurt public schools: charters, vouchers, ISD, etc.

He also sits at the lead of the most powerful educational committee in Raleigh. He should know how precarious funding for a quality public school system can be and how lowering business taxes even more would twist the tourniquet of funds that are needed in our public schools.

But that does not matter to him.

Hise has been known for protecting gerrymandered districts, the original HB2, and recently the municipal charter school bill.

From WUNC last May 31st:

Under the legislation, the municipalities would fund these charters with local taxes.

Critics say it sets a bad precedent for the rest of the state.

Proponents, like GOP Senator Ralph Hise, say it gives local communities more educational choices.

“Municipalities all over will have the option,” Hise said, “or, in this case, these four will have the option of starting a school. They still have the option of going the traditional route and creating a non-profit to do the exact same thing.”

This past Thursday, Travis Fain of WRAL reported that legislation was being “pitched in legislature” to lower business taxes even more in North Carolina.

A tax cut that would save North Carolina businesses hundreds of millions of dollars has support from key leaders in both General Assembly chambers, a pair of Senate bill sponsors said Thursday.

Senate Bill 622 would roll back the state’s franchise tax, gradually cutting it from $1.50 per $1,000 of a company’s tax base to $1 for each $1,000.

Sen. Ralph Hise , R-Mitchell, said the bill would cut taxes by about $140 million a year by the second year.

Hise said the bill stops at $1, but his goal is to get rid of the franchise tax entirely at some point in the future, and his bill “would put us on a path” to do so.

Sen. Jerry Tillman, R-Randolph, said he’d like to see the rate hit zero over five years.

And there’s Tillman again.

Take a look at the graphic below from the Center on Budget and Policy Priorities.


Businesses in North Carolina already enjoy the most friendly tax atmosphere of any state in this part of the country (if not the whole country). According to Forbes in 2018:

North Carolina has the best business climate in the U.S. and tops Forbes’ Best States for Business ranking for the second straight year.

North Carolina’s labor, energy and tax costs are all well below the national average and rank as the second lowest in the U.S. overall, per Moody’s Analytics. The 3% corporate tax rate is the lowest in the country.

The point is that NC is already great for businesses. And now Hise and Tillman want to give them more money that may never be shared with workers in the form of higher wages and added benefits but will certainly cut more revenue from the state whose responsibility it is to finance a quality public educational system.

The added punch to the gut is that Hise and Tillman are fighting to give more money to charters and vouchers when they are literally trying to dam the revenue stream for the state budget under the auspices of being business friendly.

More money to those “reforms” means less for traditional public schools. Less resources for traditional public schools hurts performance. Lower performance grades for traditional public schools means a fabricated need to have “reforms” and finance them with state money which will lessen percentage-wise with this type of legislation.

That’s not a slippery slope; it’s a manufactured uphill climb for public schools.