Local News

N.C. Lawmakers Tentatively Agree To $18.9 Billion Final Budget

Posted July 5, 2006

— The General Assembly gave its initial approval Wednesday to an $18.9 billion budget plan that finally starts trimming "temporary" tax increases supposed to come off three years ago.

By votes of 82-35 in the House and 32-16 in the Senate, lawmakers moved toward increasing state spending about 10 percent from last fiscal year, thanks largely to a roughly $2 billion surplus for this year.

"This is a budget that is very hard to criticize, very easy to like ... and one that all of us should support," House Majority Leader Joe Hackney, D-Orange, said during the House debate.

The final votes in each chamber were expected Thursday and the proposal will then go to Gov. Mike Easley for his signature.

The quarter-penny decrease in the state sales tax -- from 7 percent to 6.75 percent -- and a drop in the highest individual income tax bracket -- from 8.25 percent to 8 percent -- partially removes taxes that went on the books in 2001 to help lawmakers narrow a budget shortfall that ultimately reached $1.6 billion.

Lawmakers delayed expiration of those taxes in 2003 and 2005 but extra money this year, largely the result of a recovering economy and one-time revenue, convinced Democratic lawmakers that some of them could be removed.

Most of the rest of the surplus was spent on the largest state employee and teacher raises in years, more than $560 million for emergency reserves and construction repairs and $206 million for building projects.

The lean 156-page bill also keeps non-budget-related provisions to a minimum, at the insistence of House leaders. Senate Democrats also kept out several local House spending items defined by some critics as pork.

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