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Major GOP donor withholds $25,000 contribution over NC House budget
BY COLIN CAMPBELL/newsobserve: Raleigh businessman Bob Luddy, a major contributor to conservative causes, says he’s refusing to give $25,000 to N.C. House Republicans because their budget doesn’t include new tax cuts and extends tax credits for specific industries.
Luddy is board chairman for the Civitas Institute, a conservative group.
“I had planned to donate $25,000 this year to the House Republican Caucus to help re-elect a conservative supermajority,” Luddy wrote in an email to all Republican House members this week. The message was posted to the Civitas Institute’s blog Tuesday night.
“Unfortunately, after seeing the $1.3 billion in additional spending and no across-the-board tax relief in the proposed House budget I had to reconsider. ... We now find that based on the Republican budget, special interests such as film producers, non-competitive solar energy manufacturers and out of state companies are favored over hard-working taxpayers and North Carolina businesses.”
Luddy says he’ll instead give the money to the conservative advocacy group Americans For Prosperity, which is lobbying heavily against the budget and targeting GOP budget writers with ads that say they “sold out taxpayers.”
Luddy wrote that he wants Americans for Prosperity to “fight the liberal House spending plan.”
Luddy – who owns CaptiveAir and the Thales Academy private schools – donated a total of $160,000 to the N.C. Republican Party during the 2014 campaign cycle. N.C. Board of Elections records don’t show how much of that money went toward state House campaigns.
The budget plan drawing Luddy’s outcry is making its way through the House this week, likely getting its first vote on Wednesday or Thursday. The House doesn’t call for any new tax cuts, although current law will likely trigger further reductions in the corporate tax rate.
“With respect to taxes, you do have $360 million in tax reductions baked into the first year,” said Rep. Nelson Dollar of Cary, the top budget writer.
The budget would extend tax credits for solar and other renewable energy projects, technology data centers and research and development. It would also create a new tax break aimed at airlines, allowing them to avoid sales taxes on aircraft service contracts starting in 2017.
Reached Wednesday, Luddy said he’s concerned about the role of lobbyists in those budget provisions. “If there’s anything that really upsets me, it’s special interests,” he said. “We can certainly bring it to the light of day and slow it down.”
Those credits created a divide among House Republicans this week when a number of them voted against the tax and fee section of the budget during a Finance Committee meeting Monday evening. Among the “no” votes was House Majority Leader Mike Hager, who’s been a prominent critic of incentives for the solar industry. Luddy is a major supporter of Hager, giving him $5,000 in the last election cycle.
Backers of renewable energy credits worry that North Carolina would lose jobs if those industries found a more attractive package elsewhere.
But Luddy says the state shouldn’t prop up the solar industry. “These guys couldn’t exist without government subsidies, and those subsidies have to come from every working taxpayer who are capable of creating way more jobs that the solar industry could ever create,” he said.
Americans for Prosperity has said the budget is “filled with special interest giveaways,” and the group has launched radio ads attacking the House plan to spend $60 million per year on film production grants. State director Donald Bryson says Luddy’s “very, very generous” contribution will allow the group to expand those efforts as the budget battle continues.
“The budget was so negative in the way it came out, even to get to a compromise is a long way away,” Bryson said.
While the budget draft was developed by several dozen Republican appropriations co-chairs and vice chairs, AFP’s message singles out two legislators: Dollar and Senior Finance Co-Chairman Jason Saine of Lincolnton.
The group’s ads on social media feature pictures of the two lawmakers and say they “sold out taxpayers.”
The budget will likely pass the House by Friday, and the Senate has signaled it will make major changes – possibly removing the tax credits and instead adding corporate and personal income tax cuts.
Luddy could find the Senate’s budget goals more to his liking. Senate leader Phil Berger has said that with revenue growth, “now is the time” for additional tax cuts.