RALEIGH — The price of cigarettes has already made Patrick Smith a connoisseur of coupons for his favorite brand, so he wasn’t happy to hear Thursday that lawmakers may raise the excise tax by 10 cents a pack.
“I think they’re already too expensive,” said Smith, 28, of Greensboro, as he stopped in at the Circle K gas station on Lee Street. “That’s why I’ve got to use coupons.”
Smith saved $4 on his two packs of Camels and, for the time being, will be able to hold onto an extra dime per pack. Lawmakers had planned to raise the state’s tax 10 cents, to 45 cents a pack.
But a budget agreement between the Democrats who control the House and Senate fell apart when Gov. Bev Perdue, also a Democrat, threatened Thursday to veto the entire package over a proposed income tax increase.
Despite throwing a wrench in the works herself, Perdue criticized lawmakers for missing their annual budget deadline by nearly a month, claiming that the state is losing millions of dollars every day a new spending plan is not in place.
“I’m a little puzzled by her math,” said Sen. Phil Berger, an Eden Republican and his party’s leader in the Senate. “If what she’s saying is the state has lost $80 million simply because they’ve not been able to get into the pockets of taxpayers for the last three weeks, then I’m not sure that’s a bad thing.”
Republicans like Berger have criticized the Democrats’ tax plan, complaining it does not cut spending enough and does not properly account for federal stimulus funds. But because they’re not included in top-level negotiations, there’s little GOP lawmakers can do except join lobbyists, reporters and others waiting outside closed committee room doors for word from Democratic leaders.
Despite being in the same political party, House and Senate Democrats — as well as the governor — have had significantly different visions of the budget.
As those visions are compromised into one document, state government has been running on a series of continuing resolutions, temporary measures that keep government open but do not correct problems or allow for long-term planning.
For taxpayers, this means something of a reprieve from higher taxes. But lawmakers warn that some taxes will have to rise to bridge what they describe as a $4-billion-plus budget shortfall.
Still, even some Democrats are happy to see negotiators go back to the table.
“I understand it’s difficult to reach consensus on this,” said Rep. Pricey Harrison, a Greensboro Democrat. However, she said the state needs to look at other options. For example, Harrison said the state needs to collect money it is already due by keeping companies from writing off rent they pay their subsidiaries.
“Not closing the corporate loopholes is a big problem for me,” Harrison said. “The regressive nature of the sales tax and the surcharge on income taxes are problematic. Not to mention, I’ve got a lot of folks at home who are upset about the beer and tobacco taxes.”
Rep. Earl Jones, also a Greensboro Democrat, said he’s most concerned about the tax increases on specific items such as cigarettes. Jones said this week he would consider voting against any budget that contained such tax increases.
Meanwhile, school systems, social service agencies and others who run public services are left to wait and wonder what will happen next year.
Particularly troublesome to lawmakers is the impending start of school in August. School systems across the state don’t know for sure how many teachers they can hire or administrators they can keep on board.
“I’m hearing a lot of that,” said Sen. Tony Foriest, a Graham Democrat who has played a lead role in writing the education budget.
“They don’t like the uncertainty that goes with the budget procedure. They want to know that things are going to be taken care of. We’re going just as hard as we can but it’s not something you want to rush through.”
Staff writer Tricia Nadolny contributed to this report.
Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com
So far: The state budget was due July 1 but lawmakers have been unable to craft an accord.
The latest: Gov. Bev Perdue set negotiations back last week when she threatened to veto a tentative agreement over taxes.
What’s next: A temporary spending measure expires Friday. Lawmakers likely will need to extend their deadline again in order to reach a final budget agreement.
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