Subject to voter approval at the general election in 2022, enacts new Article V-A to the NC Constitution as follows.
Section 1 restricts the maximum annual percentage increase in allowed State fiscal year spending from exceeding the average inflation growth for the prior three calendar years plus the average growth in State population for the prior three calendar years before the fiscal year start. Defines fiscal year spending; inflation growth; population; and allowed State fiscal year spending. Allows for the NCGA to increase the spending limit for a fiscal year by a two-thirds vote of all members in each house.
Section 2 requires each budget enacted by the NCGA to include a transfer to the Savings Reserve of 15% of each fiscal year's estimated growth in State tax revenues that are deposited in the General Fund, with a specified exception that maintains the transfer requirement but at a reduced amount. Grants legislative authority for additional deposits in the Savings Reserve by statute. Requires legislative expenditure of funds or decline to reserve funds in the Savings Reserve, or both, by a two-thirds vote of all members in each house. Restricts withdrawal form the Savings Reserve to the NCGA only; explicitly declines to grant the authority to the Governor without prior legislative appropriation. Also prohibits the Governor from diverting funds legislatively appropriated from the Savings Reserve. Provides for a transfer of funds to the Unfunded Liability Solvency Reserve if a specified threshold would be exceeded if the funds were transferred to the Savings Reserve, unless the State has no unfunded liability. Mandates any amount of revenue collected in excess of the spending limit and reserves constitutionally established must be returned equally to every individual who filed a return for the tax year prior to the start of the fiscal year. Deems spouses filing jointly to be one individual for purposes of this provision.
Amends Section 2 of Article V of the NC Constitution, barring the enactment of any law to impose or increase any tax, or allow local governments to do so, unless approved by a majority of the qualified voters of the jurisdiction to which the tax or increase pertains.
Amends Section 22 of Article II of the NC Constitution, adding to the bills which must be read three times in each house before it becomes law to include bills (1) increasing the fiscal year spending limit established under new Section 1 of Article V-A of the NC Constitution and no other matter, and (2) declining to reserve funds to the Emergency Savings Reserve Fund, providing for expenditure of funds from the Savings Reserve, or both, as provided in new Section 2 of Article V-A of the NC Constitution, and no other matter.
Effective upon certification.
Bill S 717 (2021-2022)Summary date: Apr 15 2021 - View summary