State Budget Battle Continues

In addition to the final budget, lawmakers have also been preoccupied with a continuing budget resolution that keeps state government running. The resolution was agreed to by a joint conference committee Wednesday, and now the House and Senate will decide if it will go to Gov. Easley, who has said he may or may not sign it.

The House plan will not include a statewide 1 percent sales tax increase, but there will be some hikes.

The House plan would raises taxes on the wealthy, close the luxury-car tax loophole, and tax liquor and HMOs. Local governments would also have the option to raise the sales tax 1/2 cent.

Led by former House Speaker Dan Blue, the so-called Gang of Eight, eight Democrats along with Republicans who denied Gov. Mike Easley his 1-cent sales tax increase, vowed today to work to produce a budget that raises money from sources previously considered off-limits.

"We simply cannot ask that working families dig us out of this situation. There should be no sacred cows when you are going through a crisis. No loopholes should be off the table. No group of people above a certian income should feel that they are protected from the crisis," said Blue.

The tax plan will require two days of debate that could focus on closing more tax loopholes and using sources of money such as using university overhead receipts and tobacco settlement funds.

The plan is expected to pass the house, but not the Senate.

"We don't ever want to say that anything is dead on arrival, but it'll give us an opportunity to inject our plan into the measure, and what we believe is in the best interest of this state, and we do not believe the House proposal does serve the best interests of the people of this state," Senate President Pro Tem Marc Basnight said.

The Senate and Gov. Easley do not believe that the House proposal will produce the kind of revenue they want. Debate will run until 9 p.m. Wednesday and resume Thursday morning if necessary.