RALEIGH — State senators tentatively approved a budget Wednesday that raises taxes — it just doesn’t say which taxes.
The $20.05 billion spending plan includes a $500 million “reserve for tax adjustments,” essentially committing the state to raising that much in new revenue without saying where the money would come from.
“That’s a half-billion in taxes that will come out of the pockets of the same people in North Carolina that are losing their jobs,” Sen. Phil Berger said during the debate. “That’s just not right, particularly since we don’t know what taxes we’re talking about.”
The vote was 32-16 but must be confirmed today. The budget then will go to the House. Before a final budget is passed, the House, Senate and Gov. Bev Perdue must agree to a compromise measure.
As in other states, the economy in North Carolina is flagging. Job losses and slow corporate earnings directly affect the state’s two largest sources of revenue: income taxes and sales taxes.
Budget writers have to fill what is projected to be a $3.4 billion budget gap — a gap that could grow if the recession deepens.
Senate Democrats, who control the chamber, say they will eventually be able to lay out their tax plans but need more data from tax collections to make a decision.
“I for one, and I would hope you join me, would not want to propose any revenue package that raised any tax or required any more revenue than was necessary to fund the essential appropriations we’ve got in this bill,” said Sen. Dan Clodfelter, a Mecklenburg County Democrat and one of the Finance Committee co-chairmen. “I think it would be irresponsible for us to propose a target number we can’t actually be sure we actually need to fund this budget.”
However, longtime legislative observers say it is most unusual for a chamber not to offer its tax policy when outlining its spending plans.
The Senate budget does raise some new revenue, mostly in the form of fee increases on professionals and those who use some government services.
The budget, which spends $1.35 billion less than the spending plan passed last year, finds savings in virtually every agency and could lead to more than 700 state workers losing their jobs. Another 900 positions could be eliminated across the state.
Although budget writers say they kept cuts in education to a minimum, some of the biggest lump-sum savings came from the public schools and higher education budgets.
The Senate plan would add an average of two students to classrooms across the state and begin the merger of the state’s two pre-kindergarten programs: More at Four and Smart Start.
Democrats used parliamentary votes to block two amendments offered by Republicans. One would have cut the salaries of top state officials by 5 percent, and the other would have restored more than $60 million to help counties with school construction costs that Senate budget writers cut.
Sen. Stan Bingham, a Davidson County Republican who represents parts of High Point, was one of three Republicans to vote with Democrats to pass the budget.
Bingham said he disagreed with large sections of the budget, but wanted to preserve his ability to sit on the committee that negotiates a final compromise between the House and the Senate.
“If I don’t vote for it now, I won’t have the chance to have a say if something of vital importance to Davidson County or Guilford or High Point comes up,” Bingham said.
For example, he said budget writers nearly eliminated funding for the new crime lab in Greensboro, something he lobbied to restore.
Although Bingham said he disliked passing a budget with unspecified taxes, he said the state would almost certainly need to raise some new revenue to avoid deep cuts to basic government services.
“If we made enough cuts to balance the budget, I would feel irresponsible in not looking after things I was sent here to do and protect, like public safety and education,” Bingham said.
Contact Mark Binker (919) 832-5549 or mark.binker@news-record.com
Yes: Stan Bingham, R-Davidson; Katie Dorsett, D-Guilford; Don Vaughan, D-Guilford
No: Phil Berger, R-Rockingham; Jerry Tillman, R-Randolph
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