Local Politics

Perdue not happy with proposed tax plan

Posted July 22, 2009

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— House and Senate Democrats agreed Wednesday to a plan to raise the state sales tax, so-called "sin taxes" and implement a surcharge on income taxes owed at year-end.

None of the senators like the tax increases that would add $982 million to state coffers for 2009-10, but they said they are willing to support the outline floated Tuesday by the Finance Committee.

State budget Democrats agree on revenue plan

"We all have heartburn about this, but what are our options? What are our alternatives?" said Sen. David Hoyle, D-Gaston, one of the Senate's chief budget negotiators.

It's unclear whether Gov. Beverly Perdue will approve the budget with the proposed revenue parameters. It falls short of the extra $1.6 billion in revenue she asked legislators to find to avoid deep cuts to education spending.

In a statement released Wednesday afternoon, she took lawmakers to task for their slow-moving negotiations and said they need to ensure schools, public safety and health aren't harmed by budget cuts.

"School starts back in less than a month, and principals, teachers and parents still don’t know what they can expect for their children in the classrooms. This is unacceptable," she said. "I am once again calling upon the General Assembly to do what they were sent to Raleigh for – to make tough decisions in tough times. From what I’ve seen so far, I remain very concerned about the budget’s impact on the K-12 classroom. Find a way to protect public schools and the core services of safety and public health."

Senators previously balked at the notion of sales and income tax increases, but the plan calls for a temporary 1 percent increase in the state sales tax rate and a 2 percent income tax surcharge for the next two years on people and businesses that still owe taxes at the end of the year because they have underpaid on their withholding or quarterly taxes.

Other tax increases included in the proposal include 10 cents on a pack of cigarettes, 2.8 percent on other tobacco products, 5 cents on a six-pack of beer, 4 cents on a bottle of wine and 5 percent on other alcohol.

The tax increases would take effect on Sept. 1, and senators said they want to revisit next year the idea of taxing services like car repairs and lawn maintenance in order to roll back the sales tax. If not, the extra penny on the tax rate will last at least two years.

Since the Democratic Party controls both chambers in the General Assembly, getting all members of the caucus on board with the plan essentially assures quick passage when the budget comes up for a final vote.

The state, which has been operating under a continuing resolution since the start of the fiscal year on July 1, could have a budget in place by the middle of next week. The current stopgap measure allows the governor and state agencies to spend no more than 84 percent of what was approved in last year's budget. It is set to expire at midnight on Aug. 1.

Senators said they agreed to compromise to avoid having to stretch negotiations into August and a third continuing resolution.

Charles Heatherly, who plans to buy a refrigerator in the coming weeks before any sales tax increase takes effect, said lawmakers "ran out of courage," not out of time. He said they should have been more creative in approaching the deficit and said simply raising the sales tax wouldn't be an effective solution.

"We send guys up there to do the right thing. Sometimes they do, sometimes they don't," Heatherly said. "That tax would make a difference at the end of the month, if you added it all up."

174 Comments

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  • james27613 Jul 23, 2009

    Can voters launch a recall like they did in California ?

  • Here kitty kitty Jul 23, 2009

    NOT ME! Don't count me in that group! I voted for McCrory

  • showed up late Jul 23, 2009

    Naaaahhh, those who voted for her are, for the most part, quiet and not posting. There are a few who have enough hair on their backs to admit their mistake for checking the "straight party" box.

  • Garnerwolf1 Jul 23, 2009

    You folks do realize that, statistically, over half of you posting here voted for her, right? Which means YOU"RE to blame as much as she is!

  • thinkbee Jul 23, 2009

    What a pathetic excuse for a governor..... cut the fat, lady, quit playing the education guilt trip card. Soooo glad I didn't vote for her - maybe next time people will know better..... yeah, right. Temporary tax!!!!!!! not.......

  • DBnNC Jul 23, 2009

    I will keep all of this in mind when going to the polls to vote in all upcoming elections. I hope all other voters will do the same and let's change Raleigh. If we keep voting for the same folks guess what, we will keep getting the same results.

  • Dave Green Jul 23, 2009

    " I remain very concerned about the budget’s impact on the K-12 classroom. Find a way to protect public schools and the core services of safety and public health."

    Why do they always pull the schools up other than as scare tactics? There are plenty of wasteful and less deserving allocations that can easily be cut.

    But Nooo. The legislature doesn't want to do that because bring money to their districts means they can have something positive to focus on during elections.
    I'll say it again, IT IS TIME FOR TERM LIMITS IN STATE LEGISLATURE.

    I use my real name in my posts.

  • NCPACKER Jul 23, 2009

    Well Guess what BEV..>WE ARE NOT HAPPY WITH YOU!!!!!!!!! You're pathetic at leading this State. You illegally give individuals promotions and you have not done ONE thing to move NC forward in this economy nor have you cut govt spending.

  • Boostershot Jul 23, 2009

    I have an idea!! Why doesn't she close her Charlotte, NC office? That would save the taxpayers some money. Why does she need an office in Charlotte anyway? Has any other Governor had an office outside of Raleigh??? There is the travel involved in visiting the Charlotte office...does she pay for that out of her pocket??? NOT!

  • DeathRow-IFeelYourPain-NOT Jul 23, 2009

    Of course 'ole Bev ain't happy with the Tax Plan. She wouldn't be happy unless it gave her more money than she knew what to do with.

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