RALEIGH- As plans to reform state taxes go through the General Assembly and Governor’s Office, members of the state’s AARP are speaking out, encouraging legislators to consider the impact any bill would have on the elderly.
North Carolina AARP Associate State Director Helen Savage is specifically pointing to proposed taxes on social security that the House and Senate have already approved.
“This, up until now, has not been a feature of our state tax structure. North Carolina, along with 35 other states, has specifically not taxed social security,” says Savage. “So for the state to now start saying that they’re going to tax social security income is a huge change in policy.”
A tax on social security is one part of one particular piece of legislation, known formally as Senate Bill 489, that’s about to go to the desk of Governor Pat McCrory for approval. The AARP is publically denouncing the bill, claiming its hikes to rates and fees on consumer finance loans would hurt the state’s elderly community members.
Savage said the average social security benefit in North Carolina is $13,000 a year, only around half of which will be exempt from taxation.
“For about a third of our state’s 65-plus population, social security is their only source of income or it’s 90 percent of their income,” Savage says.
Representatives from the state AARP held a press conference on June 12 to voice these concerns. They also discussed the shrinking funding for programs that serve the elderly—for example, Savage says a waiting list is now in place for the Meals on Wheels program, which is designed to battle hunger among needy groups, including seniors.
“If local communities are getting less from the state and they have to make up the revenue in some other way, their way of raising it is through increasing property taxes,” says Savage. “And those are things that really hit our population very hard.”
To meet these increasing demands for services in the face of cuts at the state level, Savage says tax increases might happen at the local level.
“We’re worried that there is not only currently insufficient funding for these programs, but that under a tax reform proposal that there would be even bigger cuts in the programs,” says Savage.
AARP officials have noted that in the past, other North Carolina governors have vetoed similar pieces of legislation; for instance, in 2003, Governor Mike Easley vetoed House Bill 917, which also would have increased the costs of loans.