Use revenue turnaround to help seniors

Published May 8, 2015

Editorial by Rocky Mount Telegram, May 7, 2015.

Let’s give Republican leaders of the N.C. General Assembly their due for the state’s new tax system: They turned a projected $270 million shortfall into a $400 million surplus. That’s a swing of more than half a billion dollars.

But as lawmakers celebrate the state’s good fortune, here’s hoping they use the opportunity to reconsider eliminating the medical deduction on personal income taxes.

Seniors have been hit particularly hard by the elimination of the deduction. It’s tough enough to pay exorbitant health care costs on a fixed income, but in the past, folks could count on those bills to give them a little relief when it came time to pay taxes. Now, without the deduction, many North Carolina families are feeling the pinch of medical expenses twice as hard.

Legislation to restore the tax break has been introduced in the N.C. House. The cost of the deduction has been estimated at about $38 million a year. The state’s $400 million surplus would more than handle such a deduction.

Gov. Pat McCrory, who rightfully celebrated the revenue news this week, already has said that restoring the medical deduction should be a priority for the legislature. He also has called on the state to shore up its reserve fund, which currently sits at 3 percent of the general fund. Doing so would give the state a little more flexibility when it comes to emergencies, including some much needed infrastructure repairs.

The $400 million surplus is largely the result of smaller refunds to taxpayers, most of whom saw the state take less money out of their paychecks throughout the year. In some cases, taxpayers found themselves owing the state money on April 15. Many of us hardly noticed the reduced withholdings in our checks.

But as we said at the beginning of this piece, lawmakers deserve credit for putting together a plan that keeps North Carolina fiscally healthy. Tweaking that policy further would help ease the burden on taxpayers, particularly those with high medical bills.

http://www.rockymounttelegram.com/opinion/our-views/use-revenue-turnaround-help-seniors-2870665