Last week, Senate leader Phil Berger came up with a costly draft amendment to the Senate budget that he claimed represented the demands of the Moral Monday movement. Berger told protesters that he was unable to find a single sponsor for the bill, which he said would cost more than $7 billion and require a corporate tax rate hike to 50 percent.

The ‘amendment’ has become the cornerstone of the Civitas Institute’s #MoneyMonday smear campaign, aimed at discrediting the Moral Monday movement as extreme and fiscally irresponsible.

Here’s a screencap of the latest Civitas story:

In an opinion piece published Wednesday citing only Berger and the Civitas Institute, Forbes contributor and Director of State Affairs at Americans for Tax Reform Patrick Gleason writes that “it’s now clear that the progressive North Carolina protestors’ agenda, once the actual costs are advertised, won’t find much support even from Democratic legislators, let alone the public.”

The non-partisan fiscal staff found that the Moral Monday agenda, if implemented, would require state lawmakers to raise taxes by $7 billion. For some context, such a tax hike would increase the North Carolina general fund by a whopping 35 percent. The Moral Monday plan would also necessitate a nearly ten-fold increase in the state corporate income tax, taking the rate from 6 to over 50 percent. Combined with the federal corporate income tax, the highest in the world, if Rev. Barber and crew had their druthers, companies would face a combined corporate tax rate of over 80 percent on profits earned in North Carolina. The likely result of such an onerous tax would be a mass evacuation of companies from Research Triangle Park, Charlotte, and elsewhere in the state. The Raleigh-based Civitas Institute estimates the Moral Monday agenda would require an additional $10 billion a year in higher tax revenue, which amounts to an unheard of 50 percent increase in the state general fund. While an amendment has been drafted to fund Moral Monday’s expensive agenda, don’t expect to see Democratic legislators in North Carolina champion and introduce it, even the most liberal. Just as President Obama’s budgets have garnered a grand total of zero votes in the Democrat-controlled U.S. Senate, legislative Democrats in North Carolina are showing a similar aversion to putting their money where their mouth is when it comes to funding a progressive budget.

Forbes – North Carolina progressives demand billions in higher taxes, 80 percent corporate tax

But there’s a pretty significant problem with these conclusions – Berger’s amendment includes expensive provisions that are not backed by the Moral Monday movement. And without these irrelevant sections, the NC Budget & Tax Center concludes that Berger’s proposal “is not only revenue neutral but provides for additional revenue to meet the state’s pressing needs.”

From the NC Budget & Tax Center analysis:

First, it is important to note that the amendment was drafted without a prior conversation with Moral Monday protestors about the specifics of their policy proposals and makes various assumptions, some false or exaggerated, likely for effect. Two particularly egregious examples are in the assumption that government should pay the health insurance premiums on the private sector market for uninsured North Carolinians and that the corporate income tax rate should be 50 percent. These two provisions are likely tied together in that in order because boosting the corporate income tax rate to 50 percent would cover the of the premium payments, thus keeping the budget in balance. The Moral Monday movement and many other organizations and medical professionals have called explicitly for the expansion of Medicaid and an overall goal that all North Carolinians should be able to access affordable health insurance. The latter is something to aspire to and most policy experts in the field would design a system of coverage in which people contribute to their premiums. No one has suggested that people not contribute to their own premiums. Moreover, it is likely that with the expansion of Medicaid along with the availability of the health care exchange far fewer North Carolinians would be eligible under the provision as detailed in this amendment. There has never been a call for the corporate income tax rate to rise to 50 percent but rather a call for profitable corporations to pay their fair share in supporting the public investments that not only help their businesses thrive—educating the workforce and building a modern infrastructure—but deliver a quality of life for their employees.

Read the full analysis here.

As for the fiscal staff analysis, the ‘fiscal note’ is not an official note, and addresses only the cost of the tax hike Berger claims would be required to pay for his proposal. As noted above, the tax increase is not part of the Moral Monday agenda.

From the note:

[This confidential fiscal memorandum is a fiscal analysis of a draft bill, amendment, committee substitute, or conference committee report that has not been formally introduced or adopted on the chamber floor or in committee. This is not an official fiscal note. If upon introduction of the bill you determine that a formal fiscal note is needed, please make a fiscal note request to the Fiscal Research Division, and one will be provided under the rules of the House and the Senate.]

Berger’s draft amendment:



Fiscal note on the amendment:

