We got a telling glimpse into how business is done by the Republican majority in North Carolina’s state legislature this week.
Whistleblowing and retribution
Rep. Julia Howard (R) is one of the longest-serving members of the NC General Assembly. She represents Davie and Rowan counties, a reasonably conservative district, but Howard isn’t known as a highly ideological warrior. She has long been a senior member of the House Finance Committee, including — until Tuesday — one of its senior chairs, responsible for running the committee and moving legislation.
House Speaker Tim Moore removed Howard from her position as senior finance committee chair on Tuesday after she spoke out publicly with ethical concerns over a bill that Republicans were promoting in her committee.
Specifically, House Bill 334 has to do with tax treatment of PPP loans. PPP loans are already untaxed under state law. HB334 would go further, allowing businesses to count PPP loan money spent as a deductible expense.
The problem is, some of the bill’s biggest supporters in the General Assembly also stand to profit from it personally.
Guess Who Got PPP Loans in North Carolina?
Like we saw across the country, access to PPP loans turned out to be highly uneven. The application process was long and confusing for most. Big businesses scored large loans, while most small businesses failed. One analysis showed that 50% of PPP loan money in North Carolina went to just 4% of businesses.
Among those who scored were several prominent Republicans in the General Assembly:
- House Speaker Tim Moore — $25,000 (he owns a law practice)
- Rep. John Bradford — $400,000 (software company)
- Sen. Chuck Edwards — $1,000,000 (banking and real estate)
None of this information was public knowledge until local journalists started checking.
This means that all of these lawmakers would personally profit from changing the tax treatment of PPP loans. Bradford, in particular, could save up to $20,000. It’s unclear just how much Senator Edwards would save, but it’s reasonable to assume it is far more.
Howard told her Republican colleagues that she had grave ethical concerns about lawmakers who stood to personally profit from the bill also promoting it (all 3 above are prominent supporters). She kept the bill in committee while airing these concerns in the caucus.
Another of Howard’s concerns was that while the legislature was acting quickly to change the PPP loan treatment, unemployment benefits — which have gone to far more North Carolinians — would still be taxed.
She was ignored in the caucus. She then made her opposition public. And Speaker Moore removed Howard from her position as chair just days later.
What’s happening now
Rep. Howard’s gavel was taken away. The senior chairmen of the House Finance Committee are now Republican Reps. Setzer, Szoka and Bradford (yes — that Bradford).
Immediately following the revocation of Howard’s gavel and the issue being made public, Republicans also quickly passed an amendment that would no longer tax unemployment insurance as income.
“I came here to Raleigh to represent the interests of business,” said Sen. Chuck Edwards, recipient of a $1M PPP loan
We’ll keep you updated with more.
Read more: “Cockroach Theory and Political Corruption in the North Carolina GOP”
Carolina Forward is a progressive policy organization dedicated to building a more just, democratic and prosperous North Carolina. Learn more at CarolinaForward.org.