A chief architect of a
North Carolina tax overhaul plan that's been rejected by other Senate
Republicans and the governor said Thursday that he has resigned as
co-chairman of the Senate Finance Committee.
Sen. Bob Rucho,
R-Mecklenburg, wrote to Senate leader Phil Berger on Thursday to submit
his resignation as chairman effective Tuesday afternoon, two hours
before the tax-writing panel met to discuss an alternative tax overhaul
plan presented by Berger.
"We both agree that real comprehensive
tax reform is crucial to the economic future of North Carolina and its
citizens, but we have a fundamental disagreement on the most effective
model of tax reform and the management of that legislation," Rucho wrote
in the letter dated Thursday.
Several weeks ago, Rucho and Berger
rolled out to great fanfare a tax reform plan that would have expanded
broadly the services subject to the sales tax while lowering income and
corporate tax rates. But Gov. Pat McCrory said he preferred other plans —
one by House Republicans — that took an incremental approach on
lowering tax rates and allowing more services under the sales tax.
was absent from Tuesday's Finance Committee when Berger offered an
alternative that would gradually eliminate corporate taxes without
adding any new sales taxes to services. On Wednesday, Rucho said he
would oppose the new plan and that true reform in a modern economy
extends sales taxes to services.
The full Senate gave tentative
approval to Berger's package Thursday, with Rucho one of two Republicans
to vote against it. Rucho said in an interview later Thursday that the
decision by McCrory and House Republicans to go another route forced
Berger to offer a compromise and "basically gutted what comprehensive
tax reform is."
Rucho said he resigned the chairmanship because he
believed it was inappropriate to remain in leadership while opposing
other Senate GOP leaders on such an important issue: "There was too much
of a difference in philosophy."
Berger, R-Rockingham, released a
one-sentence letter to Rucho: "I hereby respectfully decline to accept
your resignation as co-chair of the Senate Finance Committee." Berger's
office said he wouldn't comment further.
Rucho said later the
response doesn't change his decision to resign. He may it find difficult
to detach himself completely from the post. Rules governing the chamber
give Berger "the exclusive right and authority" to appoint committee
Rucho, who already criticized the Republican governor for
failing to embrace the original Senate plan, went further in his
letter. "It is a huge disappointment that the governor and the Speaker
of the House did not provide the leadership or have the political
backbone to fight the special-interest groups, who favor loopholes over a
fair tax system," he wrote.
The North Carolina Association of Realtors, N.C. Hospital Association and other groups had opposed the Rucho plan.
Speaker Thom Tillis, R-Mecklenburg, said in a statement that Rucho's
criticism "simply appears to be frustration that adequate support could
not be generated for this particular tax plan in the Senate."
McCrory distanced himself formally from Rucho's plan last month, Rucho
responded that if the governor "had real business experience, he would
not make such a poor policy decision."
The flap between Berger and
Rucho, one of his top lieutenants, comes as Republican budget and tax
writers are expected next week to begin negotiations in earnest on a
final two-year budget and tax overhaul.