Local Politics

State Budget Fight Centers on Sales Tax

Posted June 26, 2007

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— State lawmakers squabbling over a proposed budget for the upcoming year are less concerned with dollars than cents – more precisely a quarter-cent tax.

A 0.25-cent sales tax increase was adopted several years ago to help balance a tight budget. It is set to expire on Sunday as the new fiscal year begins.

Senate leaders agreed to get rid of the sales tax, as well as a temporary income-tax increase for the top tax bracket, as part of its budget. The House version of the budget retains the taxes, however.

"If they allow those taxes to expire, I think they will be taking the side of the people and allowing the people to keep more of their money," Senate Minority Leader Phil Berger said.

The House has tentatively passed a continuing resolution that keeps the sales tax in place as part of paying for state government operations for a time after June 30. The resolution is expected to be presented to the Senate on Wednesday, but it's unclear which side will blink.

Rep. Jim Crawford, D-Granville, warned that letting the sales and income taxes fade away would leave the state vulnerable to shortfalls in the future.

"(A tax cut) looks good. It sounds good. But, down the road, folks will be starving, and won't have any health care," Crawford said. "If that sunsets, I think it will be gone, and it may be another year or two, but we'll be raising taxes again."

Gov. Mike Easley said he's frustrated by the legislative impasse. A delay in a 2007-08 budget costs schools that need to hire and make plans, he said.

"It creates a lot of stress on those waiting to see what the outcome is," Easley said.

Easley has said he agrees with House Democrats that the taxes need to remain in place to generate about $300 million a year for programs.

"If we lose our revenues, we could, for no reason at all, spin ourselves into a terrible situation," he said.

Lawmakers also have other challenges in hammering out a final budget, including how to ease the Medicaid burden on counties.

19 Comments

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  • methinkthis Jun 27, 2007

    Let the tax expire and balance the budget within the growth and surplus that is already available. Stop the "I never saw a tax I didn't like.." mentality. So much waste....

  • hpr641 Jun 27, 2007

    The tax revenues the state received this past year was $1,500,000,000 more than they predicted (yes, $1.5 Billion, with a B). They have had a tax on the books that they promised was only temporary due to the post-9/11/01 downturn in the economy and would only be on the books until state revenues returned to their expected levels. And now, our faithful Democrat-led House, Senate, and Governor just can't find room anywhere in the budget for allowing this temporary tax to finally die. After Jim Black's fiasco gave their party a black eye, you'd think they'd want to make nice with the voters - apparently they think we're idiots ... Well maybe we are, these guys got elected somehow.

  • Panther Jun 27, 2007

    I vote for politicians to make tough decisions, not to waist our money and fatten their wallets. This tax should expire and the elected leaders should learn to live on a budget, Oh what a new concept. “living on a budget, lets seeee?

  • PickAnotherID Jun 27, 2007

    If things are really as dire as Easley & Co. make out, then let this "temporary" tax expire, and pass a permanent increase to cover the long term issues being raised.

    What's that? Oh, it's politically more expedient to keep extending a "temporary" tax than try and get a permanent one passed??

    Then maybe it's time we elected some folks who are more focused on their constituents than what's politically expedient.

  • casp3r Jun 27, 2007

    "(A tax cut) looks good. It sounds good. But, down the road, folks will be starving, and won't have any health care," Crawford said. = No my family will not be starving and we pay for our own healthcare also. They always act like its for the poor but do they really get the money from these taxes or they use it on something else. How bout getting a job and stop wanting the government to take care of you.

  • atozca Jun 26, 2007

    Good point mt06111. Fortunately I am not one of the average Americans that have credit card debt. If I can't aford it, I do without.

  • puryeardl Jun 26, 2007

    "If we lose our revenues, we could, for no reason at all, spin ourselves into a terrible situation," he said.

    you can't lose something that's not yours if you had it in the first place. it's the people's money and not the lawmakers.

  • mt06111 Jun 26, 2007

    atozca says: "This was designed to be a temporary tax. Let it expire as designed. Learn how to manage the monies you have. We the people do this everyday."

    Doesn't the average American have $8k in credit card debt? I think that means people actually DON'T do it everyday.

  • Tax Man Jun 26, 2007

    It was a TEMPORARY tax and it needs to go away permanently. Our sales taxes are already among the highest around - it is crazy. NC taxes its citizens to death (and after). We do not need this sales tax - it has been scheduled to die on 6/30 and it needs to die on 6/30/2007! These tax & spend liberals in the House need to go home for about 10 years and quit stealing our money to pay for their "Jim Black" cronyism pork! Get rid of the .25% State Sales tax - now.

  • amjackson4379 Jun 26, 2007

    "Rep. Jim Crawford, D-Granville, warned that letting the sales and income taxes fade away would leave the state vulnerable to shortfalls in the future.

    "(A tax cut) looks good. It sounds good. But, down the road, folks will be starving, and won't have any health care," Crawford said."

    Can you believe they are even using scare tactics when it comes to sales tax? That was a temporary tax, not one meant to safe health care, or to keep people from "starving"

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