Gov. Bev Perdue recently unveiled a plan to avoid the long delays in state income tax returns of last year, and get everyone’s money out faster.

The plan, however, has drawn fire from state Republicans, who are themselves engineering a plan to slash the state’s earned income tax credit for lower-income families in a move N.C. Rep. Ken Goodman said breaks the Republican promise against any tax increases in the upcoming budget.

Last year, the cash-strapped state government took months in some cases to get returns out to taxpayers who had paid too much over the course of the year, so Perdue, State Controller David McCoy and other state officials signed off on a plan to borrow about $500 million from various state agencies until the end of June to ensure taxpayers will get their checks within six weeks of filing.

The deadline to file individual income tax returns is April 15, though a six-month extension may be granted.

“It’s the taxpayers’ money,” Perdue told reporters in Raleigh, explaining her rationale for moving the money around.

GOP opponents in the General Assembly went after the plan, and particularly a proposal to borrow $100 million from the North Carolina Employment Security Commission’s Reserve Fund which owes nearly $3 billion to the federal government.

“What the Governor has done is borrow money from some funds temporarily until all the tax revenue comes in to make sure the refunds will be paid expediently,” Goodman explained Friday. “This means everybody will get their checks on time, and I think it’s a prudent thing to do.”

Goodman takes issue, however, with a Republican plan to essentially hike the income tax on the state’s poorest people.

Davie County Republican N.C. Rep. Julia Howard introduced House Bill 93 earlier this session, which would essentially do away with the “refundable” part of the credit.

Republicans say the change would save the state about $52 million a year, but Progressives point to the benefits it affords impoverished families in the state.

The North Carolina Justice Center published figures this week showing more than $400,000 went to needy families in Richmond County alone last year, where half of the families filed for it. Statewide, tens of millions of dollars went out.

“Counties in every corner of North Carolina see powerful benefits from the Earned Income Tax Credit,” N.C. Budget and Tax Center Director Alexandra Forter Sirota said in a press release. “Any efforts to undermine the credit would also undermine the economic health of every region in North Carolina.”

“This is a tax increase anyway you cut it,” Goodman said Friday. “They promised during their campaigns last year there would be no more taxes, but if you pass a bill that makes people pay more taxes than they did last year - that’s a tax increase.”

Goodman sided with Republicans on another measure this week that is expected to mean about $400 million in new taxes for N.C. businesses this week, saying Democrats would’ve also decoupled from federal depreciation laws to save money in next year’s budget as well, but it still amounts to a tax increase.

“I can see their line of reasoning on that one, and I actually voted with them, but it still amounts to a tax increase,” Goodman said. “I think the moral of this story is to be careful what you promise, because you may not be able to do it.”

Staff Writer Philip D. Brown can be reached at (910) 997-3111 ext. 15, or by e-mail at pbrown@heartland publications.com.