Local Politics

Lawmakers agree to stopgap spending plan

Posted June 30, 2009

— The state Senate avoided a showdown on the eve of the new fiscal year Tuesday by agreeing to the House version of a temporary spending plan to run North Carolina government while a final budget gets worked out.

The Senate's 35-13 vote to accept the House plan sent the stopgap spending measure to Gov. Beverly Perdue, who was asked to sign the legislation before the old fiscal year ends at midnight. There was no immediate word from Perdue's office about the legislation.

The final plan sets spending parameters that Perdue and state agencies must follow through July 15. The Senate had wanted no expiration date but conceded to the deadline, which House Democrats argue will put pressure on negotiators working out the final budget.

"It's not worth fighting over," said Senate Majority Leader Tony Rand, D-Cumberland.

State government probably won't grind to a halt without the so-called "continuing resolution" in place, but there would have been no directions on how to spend because the old budget expired Tuesday, leaving Perdue with her emergency powers.

The stopgap spending measure directs Perdue and state agencies to spend at levels no more than 85 percent of what was allocated in the past year's budget. It's a reflection of the deep cuts in Senate and House budget plans because tax collections were at least $3 billion off expectations for the year ending Tuesday.

The temporary measure also prevents pay raises – which aren't expected next year – and directs bosses of state workers whose positions are slated to be eliminated in both the House and Senate versions of the budget to give them 30 days' notice before they are laid off.

Rand said he didn't know whether the House and Senate Democrats could complete their work in two weeks. The temporary measure can be extended if needed.

"It's reasonable. I don't know whether we can do it or not," Rand said. "The revenue package is the toughie."

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.

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.

Senators want to lower the personal income tax rate and corporate income tax rate. They also want to lower the sales tax and begin taxing a range of services, from car repairs to lawn care to home improvements. House members also want to tax a handful of services.

One senate proposal includes a tax on recreation and entertainment. This tax would include items like greens fees for golfers.

"These politicians have no conscience. They'll tax anything," recreational golfer Al Hunter said on Tuesday. Hunter said he likes to hit the course to relax and get away from the real world.

Hoyle said the taxes are an effort to keep "our universities strong" and "community colleges and public schools open."

"Everybody's got to put a little bit in the game," Hoyle said. "We're not trying to kill anybody."

Opponents to the tax argue that golf is a key driver to the state's economy, contributing roughly $5.3 billion a year. The U.S. Open was held at Pinehurst in North Carolina in 1999 and 2005. It is scheduled to be held there again in 2014.

“I sympathize with the budget shortfall, but I think they need to looks somewhere besides green fees. I really do,” avid golfer Bob Powell said.

Hoyle does not believe the tax will have a negative impact. The tax would cost golfers half the cost of a ball, he estimates.

State budget Lawmakers must work out stopgap spending plan

Plans from the House and Senate would raise cigarette and alcohol taxes and require sales tax collection on electronic downloads and online retailers who have agreements with local Web site owners to tout their merchandise.

Negotiations have centered around provisions that would tax Social Security benefits on the highest wage earners and increase the residential and retail electricity sales tax from the current 3 percent, said Sen. David Hoyle, D-Gaston, co-chairman of the Senate Finance Committee.

"We're still poles apart on the basic (tax) philosophy," Hoyle said.

House Majority Leader Hugh Holliman, D-Davidson, said Democrats in his chamber are worried that as many as 50,000 businesses would have to fill out sales tax collection forms for the first time, leading to confusion.

"We're willing to listen and look at that, but we want to go slower on the expansion into services," Holliman said.

Earlier Tuesday, Republican leaders said at a news conference that expanding sales taxes to cover more services is a reasonable change only when taxes are lowered elsewhere so that no additional revenues are generated.

"This is designed to raise a billion dollars," said House Minority Leader Paul Stam, R-Wake, who with other GOP members opposed the tax proposals.


This story is closed for comments.

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  • yeshoneyitsgreat Jul 1, 2009

    If the state can't collect any taxes, how can they raise taxes?? Our lawmakers don't have a clue!

  • tgw Jul 1, 2009

    Teacher's asssisant, my heart goes out to you and your family. I pray for those who are in jepardy every day.

    I'll be you'd take a 5% or even 10% paycut just to keep the rest. Yup!! Hay Bev and GA, PAY CUTS are much easier to handle that job losses. Hear me again!! PAY CUTS ARE MUCH EASIER TO

    General Assembly, ARE YOU LISTENING???? sTAFFERS WHO HAVE INFLUENCE, are you listening??? Governor Perdue, ARE YOU LISTENING???

    And if any of you leave town before this is fixed, we will take aim at your irresponsible arrogant a..!!!


    Conservatives, it's time to mobilize to save our state and our nation !!!! Now is the time!!!

  • Garnerwolf1 Jul 1, 2009

    "I wonder how many businesses are just not paying taxes they owe?" I'd say most. Individuals also for that matter. Watch the cash register next time you eat out. Especially at an ethnic restaurant. Do they leave the cash register drawer open? Do they have a calculator beside the cash register? If so, you can pretty well bet that the sales tax collected is not being paid to the state.

  • oldschooltarheel Jul 1, 2009

    "Hoyle said the taxes are an effort to keep "our universities strong" and "community colleges and public schools open.""
    So why not increase out-of-state tuitions to at least MATCH what residents of states like NJ pay for IN-STATE tuition? How about adhering to the University system's mission statement of educating the citizens of the state of NC with NC taxpayer dollars? How about not falling all over the fork out tax payer subsidized education to illegal aliens or their chattel?
    How about the Legislature & the Guv step up & take 20 - 30% of their salaries as state bonds instead of cash? How about those Legislator's & the Guv cut their benefits packages voluntarily?
    Naw, just tax the ones they can wring any money out of more & come up with more slaes taxes, gasoline taxes, etc. to catch those who do not pay income or property tax. Tax em summore ! -ought to a new vanity license plate for NC Legislators, the Guv & their chattel.

  • djcnty8 Jul 1, 2009

    While they try to figure out the budget, I have to wait to find out whether I will have a job in the fall. I work as a Teacher Assistant and got a telephone call from my principal this morning that as of right now I do not have a job. Get this fixed so we can go on with our lives.

  • areyououtofyourmind Jul 1, 2009

    "Now we can all reach deep in the anals of our souls and find another BILLION and 1/2 for Bev and her lawless makers!" - poster here on golo.

    I think you meant annals although I too think it stinks (pun intended). This absolutely cracked (pun intended) me up! I laughed from the depth of my... well, you know.

  • RDUTEC Jul 1, 2009

    Here's an idea I bet they haven't thought of.


  • EyesintheSkies Jul 1, 2009

    jason must be 12, 13 tops.

  • tgw Jul 1, 2009

    Wow, this is cheap entertainment. You guys are awesome. However, I think a few comments are in order.
    1) I would guess most folks on this blog ARE voters. Their passion seems to tell me this.
    2) Dems are angry about President Bush. Yes, he made some mistakes, but not nearly as many as the current resident-and he has not been in office 6 months yet!
    3) When a political party does not have much opposition, they run like crazy over the electorate. We have a prime example in NC. Unless the Repuplicans get their act together, we are in deep s... both in NC and across this great country.
    4) Are any of you surprised by what our GA is doing? Why? Under dem. control, they do this all the time. Normally, when cash is flowing, the wait late to abuse state employees. Are they getting a 1%, 2%, or 3% raise. Rediculous.


    CLEAN HOUSE!! NOW!! DO NOT PASS GO, COLLECT NOTHING, and send them packing. Yes elections are 16 months away! Start working NOW for a solution starting in 18 mo.

  • CestLaVie Jul 1, 2009

    IF the Senate version of sales taxes on services goes into effect, I'm sure all you golfers can afford a little more for all those green fees you pay. Golf is not a cheap sport. If you can afford the fees, you can afford a little more for the State, as much as you balk at the idea! I'm saying this ONLY because if this tax version wins & they're bent on taxing something, YOU can afford this part.