Local Politics

Lawmakers stick to guns as budget clock ticks

Posted June 25, 2009

— Five days remain until a new fiscal year starts for state government, and lawmakers continue to haggle over a state budget with no agreement in sight.

House and Senate budget negotiators have been working for most of the past two weeks on a compromise two-year spending plan that would erase a projected $4.6 million deficit. Most cuts have been agreed to, but lawmakers remain far apart on how to raise extra revenue.

State budget Lawmakers still far apart on tax increases

Gov. Beverly Perdue in recent days has urged lawmakers to raise $1 billion to $1.5 billion in new taxes to avoid drastic cuts to education, but she didn't provide any guidance on how to do that.

Sen. David Hoyle, co-chairman of the Senate Finance Committee, says the House and Senate have agreed to raise $990 million in revenue in fiscal 2009-10 and $1.3 billion in the second year of the budget.

"How we get the money is where the big battle is being waged," said Hoyle, D-Gaston.

House members want to use a quarter-cent sales tax increase and higher income taxes on couples making more than $200,000 a year to generate most of the additional revenue. Senate Democrats have balked at the idea of higher sales and income taxes, however.

"We've only got 11,000 people in this state making more than $1 million. If we (raise income taxes), we'll have 5,000 people in the state (in that position)," Hoyle said.

Senators want to lower the sales tax and begin taxing a range of services, from car repairs to lawn care to home improvements.

Once lawmakers agree on how to generate the money, they have to decide where it goes. The popular choice is education and the Department of Health and Human Services, but not everyone agrees with that plan.

"I'm very concerned about probation and parole (and) corrections," said Sen. Linda Garrou, co-chairwoman of the Senate Appropriations Committee. "We have a challenge ahead."

House Majority Leader Hugh Holliman said the chances of passing a balanced budget by June 30 are about 50-50.

"I think standoffs are solved pretty quickly," said Holliman, D-Davidson. "Forget about digging in your heels on certain things and say, 'We need to work out a package here that takes the Senate's position and our position and have a total package.'"

The Senate on Tuesday passed Senate Bill 311, to allow government to keep operating past the end of June in case a budget isn't in place.

The bill orders Perdue to keep spending levels at no more than 85 percent of what was allocated in the past year's budget because lawmakers are reducing spending due to declining tax collections. The temporary spending plan also would prevent any pay increases for state workers, such as automatic step increases, from taking effect unless authorized by the General Assembly.

The House Appropriations Committee passed its own continuing resolution Thursday – House leaders have criticized the Senate bill because it doesn't include any expiration date – but House members are more focused on trying to get the budget done on time.

Hoyle said he doesn't see the General Assembly meeting the June 30 deadline.

"I'm not trying to inflame my colleagues," he said. "I'm just saying we're miles apart on philosophical differences."

Others continue to hold out hope for a last-minute deal.

"Miracles do happen," said Garrou, D-Forsyth.

28 Comments

This story is closed for comments. Comments on WRAL.com news stories are accepted and moderated between the hours of 8 a.m. and 8 p.m. Monday through Friday.

Oldest First
View all
  • fedupin benson Jun 26, 5:17 p.m.

    News Flash: NC has made Slashdot.. again.. Amazon has now canceled its NC affiliates accounts because the morons in Raleigh are going to tax online click-thrus and sales. The bill hasn't passed, but Amazon has decided to vote with its feet and is now leaving the state. Imagine that. How many more big time online retailers are going to cancel NC accounts because our gooberment can't spend our tax money wisely and insists on digging deeper into our pockets. One affiliate stated that this new legislation would place an 89 cent tax on every dollar on what he does... 89% tax??? Anyone up for a RECALL ELECTION yet?

  • Surething Jun 26, 4:53 p.m.

    Actually, many studies show that "illegals" are sending less money back to Mexico or their home countries than they have over the past 2 decades. The money is not flowing back home like it once did. But I can understand why the opposite would be an assumption easy to make.

  • scientistjo Jun 26, 4:02 p.m.

    I do not live in la-la land. I base my conclusions on facts.

    UNC Chapel Hill Kenan Institute study:

    "$9.2 billion contributed to the [NC] economy by the Latino community via its purchases, taxes and labor."

  • colliedave Jun 26, 3:51 p.m.

    You all are blowing this WAY out of proportion in terms of $ spent on illegals. They are not the cause of all of our and your problems. In fact, they are not the cause of any of our current financial problems

    And you apparently live in la-la land. A significant portion of the monies illegals earn goes back to Mexico.

  • scientistjo Jun 26, 2:53 p.m.

    "just stop taxpayer support/education for illegal aliens. That by itself won't cure the problems, but it would help reduce the deficit significantly" -shep8851

    Again, comments about illegal aliens come up in the first 4 posts on GOLO. You all are blowing this WAY out of proportion in terms of $ spent on illegals. They are not the cause of all of our and your problems. In fact, they are not the cause of any of our current financial problems.

  • dplowman Jun 26, 2:21 p.m.

    What about a spending cut of 15% less than last years buget and make it the law for the next four years?

  • ncguy Jun 26, 2:17 p.m.

    Tax and Spend....

  • Garnerwolf1 Jun 26, 12:44 p.m.

    Warren Buffett said recently he doesn't think the recession is near the bottom yet, that things will continue to get worse, including unemployment. He also thinks that the Fed response will likely cause rapidly rising inflation. Although he apparently also thinks the Feds need to throw even more money at the problem. Our greed may well be what history determines sank this mation.

  • colliedave Jun 26, 12:23 p.m.

    With the Carbon Tax we will be paying more money to the Federal coffers. With Aunt Bev and her minions we will be paying more money for state fat cats. Unfortunately, our public "edjukashun" system has produced individual who cannot think for themselves and believe the clap-trap from the Unholy Church of Global Warming.

  • lumberman Jun 26, 11:42 a.m.

    How much deeper do they think we can dig in to our wallets. The slow down has cost my wife her job. Gas going back up Food stuffs going up each week. And in my neighborhood it appears that I am one of the few that still pays for their groceries.

More...