The Senate approved a plan to return millions in surplus tax revenue to taxpayers, despite complaints from some Democratic lawmakers who wanted to use the money for education or infrastructure. 

After a lengthy debate Tuesday, Aug. 27, the Senate voted 30-16 to pass House Bill 74, the Taxpayer Refund Act. 

The bill intends to refund $900 million in surplus tax revenue. Lawmakers learned earlier this summer that income-tax payments and sales-tax collections ran higher than expected. Republican legislative leaders want to give that money back to taxpayers. 

About $680 million will cover refunds and the cost of sending checks. The remaining surplus will go to the Rainy Day Fund. Refunds will be based on how much N.C. residents paid in state taxes. At a max, individuals could see $125 and couples could see as much as $250.

Legislative leaders said more than 5.1 million taxpayers will receive a refund, with more than 90% getting the maximum amount. Around 350,000 taxpayers would get back all the state income taxes they paid last year. 

“In my experience people spend their money better than government does,” Senate leader Phil Berger, R-Rockingham, one of the primary sponsors of the bill, said. 

Berger said they asked N.C. residents what they would do if they got a refund. The Senate leader said people have told him they would pay bills, buy school supplies or groceries, or tithe 10% and use the rest to cover bills. 

Democratic lawmakers didn’t support the idea. 

Sen. Floyd McKissick, D-Durham, said educational facilities are in dire need of repairs and renovation, and the surplus could go to meeting those needs. 

Sen. Natasha Marcus, D-Mecklenburg, and Sen. Don Davis, D-Greene, Pitt, voiced concerns about creating a structural deficit in the second year of the biennium if lawmakers approved the refund. 

Republican legislative leaders said that wasn’t likely. 

“There’s more than enough to cover this refund,” Sen Harry Brown, R-Onslow, said. “It doesn’t put the state in a bind in any way I can find with crunching the numbers.”

Berger said that if Democratic lawmakers want to fund school infrastructure then they should vote to override the veto which contains money for a pay-as-you-go school construction plan.

The bill goes to the House.

Gov. Roy Cooper vetoed the budget June 28. Republicans have yet to garner enough votes to override the veto. Some Democratic lawmakers would have to vote with Republicans to override Cooper’s veto.