The longest-serving member of the state House was stripped Tuesday of her chairmanship on the powerful House Finance committee amid a dispute over pandemic-related tax breaks.
House Speaker Tim Moore removed 17-term Rep. Julia Howard, R-Davie, from the tax-policy committee and placed her on the House Appropriations committee, according to House Clerk James White.
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Howard was one of four senior chairs on House Finance, but she won't hold any leadership position on the 88-member appropriations committee.
Howard didn't immediately respond to a request for comment, but House leadership released a statement confirming that the move was related to her opposition to a tax bill.
"Several weeks ago, the North Carolina Republican House Legislative Caucus overwhelmingly voted to move forward on House Bill 334. ... Over the proceeding weeks, against the will of the caucus, Rep. Julia Howard, in her role as one of four Senior House Finance Chairs did not move the bill," reads a statement from Moore, House Speaker Pro Tem Sarah Stevens and House Majority Leader John Bell.
"While we respect different viewpoints, committee chairs must be willing to put personal agendas aside and move forward with the will of the caucus," the statement reads.
House Bill 334 originally gave a tax break to business owners who received a loan under the federal Paycheck Protection Program, allowing them to deduct the expenses they paid with that money on their state income taxes.
The forgivable loans aren't taxable, and the federal government and 47 other states allow deductions on the business expenses.
On Tuesday, an amendment to the bill that was approved by a voice vote on the House floor without any audible opposition added unemployed people to the mix. Under the revised measure, people who received weekly unemployment checks last year could deduct up to $10,200 of that on their income tax returns.
A final House vote is set for Wednesday afternoon, and the bill would then move to the Senate.
Moore, R-Cleveland, didn't have an estimate for how much the tax breaks would cost North Carolina, but he said the federal aid the state has received during the pandemic would cover it.
He acknowledged that he and a number of other lawmakers received PPP loans for their own businesses. But he dismissed any criticism that lawmakers had a conflict of interest in approving the tax break, noting that more than 130,000 businesses across the state got PPP loans, and the tax break would apply to all of them.
"It’s no different than voting on a tax bill, say for child tax credits, if you have children," he said. "[PPP loan recipients] is a class that’s so large that it was ethical to vote on it. What would be unethical is if you had a thing that said legislators don’t pay this tax."
Moore even obtained an opinion to that effect from legislative ethics staff after Howard questioned the push for the tax break.
Howard had also criticized the bill for not giving a similar state tax break to workers who lost jobs in the pandemic. Moore said that, after reviewing the idea, many lawmakers agreed that jobless benefits also should get a break.
"In North Carolina, we’ve always taxed unemployment insurance benefits," he said. "But, you know, things are different now. We’re dealing with a pandemic, and we actually have the funds through the [federal relief] funds that have been appropriated to be able to offset those costs."