Local News

N.C. Senate Gives Final Approval To $17 Billion Budget

Posted May 5, 2005

— The state Senate has given final approval to a nearly $17 billion spending plan that makes a host of tax changes while strengthening education funding and cutting Medicaid growth.

Without debate, the Senate voted 28-20 to send the Democratic-composed budget to the House. The Senate gave its initial approval late Wednesday by a similar party-line vote.

The measure raises the cigarette tax by 35 cents, makes a half-cent sales tax increase permanent and increases consumer prices on liquor, telephone calls and satellite television.

The budget fills a potential billion-dollar shortfall for the fiscal year starting July 1 by generating more than $750 million in new taxes or making others permanent.

The measure also reduces the corporate income tax starting in 2007, amends an anticipated lottery that has yet to become law and bans video poker.

Democrats took heat for the budget. Republicans complained about government largesse, while advocates for the poor criticized tax breaks that benefit the wealthy. Gov. Mike Easley called many of the Medicaid cuts proposed by the Senate extreme and unacceptable.

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