House budget would cut $3 billion but have no tax increases

RALEIGH, N.C. — Leaders in the state House said Monday that unlike the governor's and Senate's proposed budgets, its spending plan for the 2009-2010 fiscal year would be without any tax increases.

The House’s $17.5 billion budget proposal is $3.3 billion less than the 2009-10 fiscal year's original spending plan of $20.8 billion and nearly $2 billion less than Gov. Bev Perdue's revised budget of $19.4 billion.

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House budget calls for no tax increases

Although specific details are still being worked out, $1.6 billion in cuts would be in education, said Rep. Mickey Michaux, D-Durham, who chairs the House Appropriations Committee. Health and human services would also see about $1.4 billion less.

Michaux said House budget writers are trying to avoid pay cuts and furloughs but that there will be job cuts because of programs and services being cut.

Perdue's originally proposed a $21 billion budget, and then made revisions based on the struggling economy. She included a hike in cigarette and alcohol taxes. The Senate's nearly $21 billion budget would tax more goods and services at a lower tax rate, for an additional $500 million in revenue.

"Just cutting everything out, I don't know how you do that," Sen. A. B. Swindell, D-Nash, said. "We cannot let our education system suffer from a situation this critical."

House Minority Leader Paul Stam, R-Wake, though, said in the current economic environment, now is not the right time to raise taxes. The House's proposed budget, he said, is still more than the budget was five years ago.

"Things weren't so bad," he said. "We were able to furnish essential state services. The sky didn't fall."

Michaux said he hopes the same can be said this time around.

"These are going to be some trying times," he said. "We've never been in this position before."