RALEIGH – Richard Moore is state treasurer of North Carolina, a rising Democratic star, and a likely gubernatorial candidate in 2008. But perhaps most North Carolinians know him as the guy they’ve seen in those NC Cash ads (helpfully produced at state expense) who offers to help them recover their lost insurance refunds and lapsed bank accounts.

Richard is an energetic, creative, and dutiful public servant (who occasionally errs, but to do so is human). He’s done a great job marketing the escheats fund. In fact, I like him so much that I’m thinking about asking him to help recover some other money I and many others were mistakenly forced to pay. I’m talking, of course, about the hundreds of millions of dollars that North Carolina taxpayers will pay through June 30 of this year in sales and income taxes that were supposed to expire at the end of the last fiscal year.

Specifically, the General Assembly and Gov. Mike Easley agreed in 2005 to extend a half-penny on the state sales tax and maintain a 8.25 percent top income tax rate even though both measures, originally enacted in 2001, were sold as “temporary” revenue fixes in the midst of a budget crisis. For the 2005-06 fiscal year, the sales-tax extension was projected to cost North Carolina shoppers $417 million. The income-tax extension was to cost upper-income taxpayers – and an unknown number of their employees and customers, via lower wages and higher prices – about $40 million.

We know now that these “emergency stop-gap measures” were unnecessary. Revenue growth has been higher than expected. With state lawmakers arriving Tuesday for their 2006 session, the story is that they will have a whopping $2 billion surplus in recurring and non-recurring funds for dispersal in a 2006-07 budget plan. Obviously, without the extra $457 million from those tax surcharges enacted in the 2005 session, there would still be a healthy surplus.

Quite literally, these revenues, “enhanced” on the purported grounds of budgetary necessity, are surplus. This is akin to your employer withholding too much of your income than is necessary to pay your state and federal income tax, or the mortgage company withholding too much of your monthly payment in escrow to pay your homeowners insurance and property tax. In each case, you are entitled to a refund – either all at once, in the case of income tax, or by reducing your future payments, in the case of an escrow account.

As an aggrieved citizen overcharged on his tax bill, I suppose I could get downright testy and demand immediate recompense in the form of a refund check. But never let it be said that I can’t be reasonable. I’m willing to settle for the escrow model.

First of all, let’s fix the overcharge. Under current law, the extended sales and income taxes will stay on the books into the fiscal year that begins July 1, 2006. That will withhold another $552 million in unnecessary state taxes in 2006-07 (the number is much higher than the previous year’s because of the date of the tax-law changes). Obviously, that needs to be halted immediately. As for the $457 million overcharge from 2005-06, let’s refund that to North Carolinians over the next two fiscal years by reducing the statewide sales-tax rate from 4 percent to 3.75 percent. Who knows, that may be so popular that the people’s representatives will decide to move the rate permanently down to 3.5 percent, or lower.

So, Richard Moore: you’re already on record expressing caution about the increasing state debt load. Lawmakers, eyeing that $2 billion surplus, may consider adding to the debt load with new statewide bond issues for schools, roads, water systems, and other projects. Even without any new debt issuances, lawmakers are reportedly struggling with the “problem” of having a huge pile of unspent money and still far more requests from state agencies and spending lobbies than can be satisfied. I think that is a “problem” lawmakers shouldn’t attempt to solve without outside assistance. They may make another costly mistake. Please help me and millions of fellow North Carolina taxpayers get our money back instead. Where can I obtain the proper form?

Hood is president of the John Locke Foundation.