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NEWS

$20 billion state budget gets tentative OK

Thursday, April 9, 2009
(Updated 8:59 am)

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

HOW THEY VOTED

Yes: Stan Bingham, R-Davidson; Katie Dorsett, D-Guilford; Don Vaughan, D-Guilford

No: Phil Berger, R-Rockingham; Jerry Tillman, R-Randolph

 

Comments

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tonymo

April 9, 2009 - 2:06 pm EDT

Okay, this is a joke right. $500 million in UNSPECIFIED tax increases about which they will let us know later! This sounds like a Monty Python movie. Are there any bonuses for AIG executives in this joke. All of those who voted for this travesty should be euthanized, and all who keep voting for these crooks hsould join them!

mthale

April 10, 2009 - 10:07 pm EDT

I am infuriated with the way things are going in Raleigh so far. What are you thinking???? You cannot add on to the classroom size to fix the budget problem. That is an irresponsible quick fix. I can't believe that the Democrats voted agains a 5% decrease in pay for top officials. I know it would hurt them, but if we weigh the differences: taxing people who don't have a job or are losing their job due to this budget, is giong to result in further recession. Therefore, logically, those with high paying salaries become subject to getting an income tax increase in many states. We should also look to that as an answer, as much as I hate to say it. I know eveyone proclaims that its socialism! But it's not, it's a taxing policy used to gain revenue just like cutting positions. How can you defend cutting public K-12 education (of all things!) and raising taxes for the lot of people who don't even have jobs & income?? How can you say it's wrong to raise taxes or cut salaries on those who are making, literally, all the money. Are we going to keep pushing NC down until we are all living on the streets, welfare budgets are going to become exhausted. We need to reverse this:
I don't know who taught you how to fish, but if they fish ain't biting, you go further up the river.

As if to say, the lot of the state don't have money or jobs, so to try and take more from them and cut more jobs isn't helping the situation. I really sincerely regret asking this of the high income state employees and residents. But if we can step back for a minute, if we can help each other, the economy can get back on track little by little. If we keep pushing things the wrong way, we are just going to keep falling deeper into a hole.
What is more important to you, money or empowering NC as a whole??
If we must raise taxes, raise alcohol & cigarette taxes and high income taxes. That's a no brainer.
And before we over-cut the budget, I would have voted for a 5% pay derease to the top earning officials. Sorry guys; but on the brightside, you have a job.
You are NORTH CAROLINA representatives, you should do your jobs by representing North Carolina, not yourselves. (Also include an outline of your $500 million tax "adjustments")
I supported you and voted for you now I think it's time the people get the same treatment.
As for this proposal, No bites.

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