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Budget writers return to negotiating table

Posted July 9, 2009

State budget
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— House Speaker Joe Hackney pushed budget writers back to the negotiating table Thursday afternoon, restarting work on a new state budget that had been stalled for a week.

Meanwhile, state Republican leaders said the state should focus more on reducing spending in a down economy than on raising taxes to balance the budget.

N.C. lawmaker meets with Obama transition team Hackney gets budget negotiations going again

House and Senate negotiators have been at odds for a week over what to cut from the budget, how to raise additional revenue and where to spend that extra money.

The House financial team, which is working on the revenue side of the equation, told their Senate counterparts Thursday morning not to expect a proposal until at least next Tuesday morning. Hackney, D-Orange, said that was unacceptable, and he ordered the team to meet with the Senate finance team Friday morning.

The budget writers from both the House and Senate, who are focused on cuts and spending, sat down together Thursday afternoon for the first time in seven days.

"Progress is just too slow," Hackney said. "I'm dissatisfied with it, and I've talked to (Senate President Pro Tempore Marc Basnight) and I know he is as well."

Although lawmakers said they would exchange proposals by the end of the evening, they remain far apart on how to spend an extra $1 billion in tax revenue the finance teams are putting together. The Senate wants to invest more in education, while the House wants to spend it on human services programs and public safety.

State Republican Party Chairman Tom Fetzer said during a Thursday morning news conference that projections of a $4.6 billion deficit are exaggerated. He and other GOP officials said the shortfall is closer to $1.1 billion, based on recent spending, and that new taxes aren't needed at all to balance the budget.

N.C. Republican Party Chairman Tom Fetzer (N.C. GOP) State budget becoming free-for-all

"Families and businesses all over this state are having to roll back expenditures to levels where revenue can cover (spending)," Fetzer said. "That's what this state has to do. We can't raise taxes on the people of North Carolina right now."

House leaders have called for a quarter-cent increase to the sales tax and higher tax rates for individuals making more than $200,000 a year. The Senate has balked at raising income and sales taxes and has proposed enacting taxes on a range of services, from car repairs to lawn care to manicures.

Gov. Beverly Perdue said neither approach will work, and she has proposed raising $1.6 billion in extra revenue to lessen the cuts being suggested to education funding.

Perdue called for raising the state sales tax by a penny for 13 months, beginning Sept. 1. Her plan also would enact taxes on a range of services, raise taxes on cigarettes by 50 cents per pack and on alcohol, lower personal and corporate income tax rates and provide tax relief to home buyers and small-business owners.

House Majority Leader Hugh Holliman said budget writers are trying to balance revenue increases with spending cuts.

"We, too, are concerned with taxes, but we're equally concerned with some of the things we're having to cut, such as teachers in the classroom, assistant teachers in the lower grades (and support for) the mentally ill, who we all know we need to do more for," said Holliman, D-Davidson. "Those are the cuts we're trying to put back in (the budget) and make sure we cover with the limited tax increases we're looking at."

State government continues to operate on a continuing resolution that expires next Wednesday.

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  • colliedave Jul 10, 2009

    The Senate wants to invest more in education, while the House wants to spend it on human services programs and public safety.

    Love how the hacks use words such as "invest"; the "investment" in education has produced those who voted for Obama.

    Also, don't the bozos on Jones Street understand that in a down economy there can be no such thing as "more?" That priorties have to be established as to which programs stay and which ones are shown the door?

  • littleriver69 Jul 10, 2009

    Blind leading the blind!!!!! I'm sure they'll come up with something stupid.

  • jpquick Jul 9, 2009

    Only House and Senate Democrats would try to raise "extra money" through tax increases in the middle of a recession.

    Democrats have proposed tax increases ranging from a low of $750 million to a high of $1.6 billion over the past few weeks.

    With a range of $850 million in proposed tax increases to avoid "brutal" cuts to "critical" programs, how can anyone take budget negotiators in the General Assembly seriously?

    The real reason for the protracted budget negotiation is a fight between various special interest groups that own the General Assembly. Lobbyists for education spending want dollars that other lobbying groups would claim for Health & Human Services, etc.

    My suggestion to the General Assembly is to adopt a "clean room" approach that many have used in the private sector.

    Kick out the paid lobbyists and work out a way to balance the state budget without draining $1.6 billion from the economy.

  • miseem Jul 9, 2009

    can u,
    I would like to see where the Community Reinvestment Act forces lenders to make mortgage loans to unqualified buyers. This and the Gramm bill in 1999 seem to be a common thread used by the right to absolve Bush/GOP of any responsibility for this current economic fiasco. Bush took these & pushed deregulation to extremes. Enforcement staff was cut & agency leadership went to people who made it clear that enforcing regs was not a priority to them. Business quickly picked up the attitude of anything goes, and no one stopped it. The rest is recent history

  • Mustange Jul 9, 2009

    CHECK THIS OUT GeorgeGray: What do today's teachers have to deal with that the teachers back in the day did not? I would counter and say that there is a tremendous amount of technology to aid today's teachers. And there were 30-32 pupils in classes when I went to school with NO assistants.

    I know that from 1995 (at least) that teachers have gotten plenty of sizeable raises and bonuses. I can remember only one or possbly two instances where regular state employees were eligible for merit raises. My intent here is not to bash teachers, just adding my 2cents worth.
    Armando de Cabana Boy
    THIS IS TYPICAL OF SOME ONE WHO HASNT BEEN IN A CLASS ROOM FOR A WHILE AND WHEN WE CATCH A KID DO SOMETHING WRONG ONE OF THE FIRST ONES SAYING NOT MY KID WE ARE GOING TO SUE THIS SCHOOL I MAKE A CHALLENGE TO YOU GOT TO A SCHOOL I DONT CARE IF ITS PUBLIC OR PRIVATE SPEND A WHOLE 8 HOURS AT THAT SVHOOL SIT IN A CLASS ROOM THEN COME BACK AND TELL US HOW IT WENT!!! LOL LOL BOY ARE YOU IN FOR A SURPRISE!!

  • truthseeker Jul 9, 2009

    I just saw the video to this story. They haven't met at all this week? That's ridiculous. Budget writers you need to stay at the table until we have a budget. What have you done all week? You can't seriously be thinking about passing another continuing resolution. Get to work please!

  • truthseeker Jul 9, 2009

    The budget fiasco is a mess. I do however appreciate Hackney pushing the pencil pushers back to the table. I can't believe that they had the audacity to try to take their time with this budget. Budget writers get a grip and write a budget.

  • whatusay Jul 9, 2009

    The answer to all problems for a democrat is to raise taxes, grow government, spend money, borrow money. Who cares about tomorrow.

  • tatermommy52 Jul 9, 2009

    The Repubs need to wade through the Dems like Mike Tyson through the heavy weights in the late 80's.

  • blueridgerunner Jul 9, 2009

    NC legislature isn't willing to cut spending that may effect the representatives and senators political standings and future political leverage and funds. Those political fixtures that have been voted into office term after term are dug in to protect their own interests and the interests of those who have been padding their pockets all these years.
    There is still much government bureaucracy that could be done away with. Duplicitous jobs and wasteful spending. I'll bet the NC Black Caucus is sitting on some dollars reserved for those "large" conventions they like to attend. But they're not the only ones who need to pony up money spent on the frivolous. Plenty of grant money being doled out to pay for idiotic research that will have no bearing on anything at any time. Plenty of pork being passed around and labeled as sacred cow money and programs. We need to clean house...and senate and pry some of those lard tail rear ends out.

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