State News

N.C. House agrees to tax package as part of budget

Posted June 11, 2009

State budget

— The full state House agreed Thursday in a party-line vote to a portion of its proposed North Carolina state budget that would raise taxes by nearly $800 million.

The House voted 64-52 in favor of higher sales and income taxes, as well as increases on liquor and movies.

House debates budget with cuts, taxes House debates budget with cuts, taxes

Democratic speakers said new revenues are needed to restore education and human services programs slated to be slashed otherwise. Rep. Phil Haire of Jackson County said the fiscal conditions require the higher taxes to "stop the bleeding."

Rep. Nelson Dollar, R-Wake, said it should be called "the blue-collar tax increase" because it would hurt working people the hardest.

The vote comes as the House tries to pass its budget version by early Saturday.

Faced with an unprecedented 11 percent decline in total tax collections compared to last year, the House had to dig $1.5 billion deeper than either the Senate or Gov. Bev Perdue recommended in their budget proposals less than three months ago.

The budget plan would raise $784 million in additional taxes, about $86 million in fees and spend $1.3 billion in federal stimulus money to close a budget shortfall.

Parliamentary rules require lawmakers to agree to the tax changes separately - including higher sales and income tax rates and levies on liquor and digital downloads - before the current budget can move forward.

That means the House couldn't approve a combined spending and tax plan until after the clock strikes midnight late Friday, at the earliest.

House and Senate leaders are aiming to present a final budget to Perdue before the new fiscal year begins July 1.

Even with the $784 million in proposed tax increases, funding for several thousand state positions still would be eliminated.

Calling it the House version of the budget a "modest revenue package," UNC System President Erskine Bowles said in a statement late Thursday that it would lessen deep cuts to education and other critical state services.

For example, it would restore about $75 million to the university system and save 600 jobs and allow for more classes.

Bowles said he still concerned about the remaining $263 million in cuts and their impact on the quality of education at the university level.

Other areas in the proposed budget that would be restored include 2,590 teaching jobs for kindergarten through third grade as well as money cut from public health and mental health programs and about $50 million in cuts to the Department of Correction.


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  • mxteam44 Jun 12, 2009

    The Bush presidency was FAR from what fiscal conservatives believe should have been done. Yes, he spent WAY too much money on things that he shouldn't have. But, he can't spend a dime without congressional approval, which included a time of Democratic control in congress. However, when the war is brought into a discussion like this, I have to say, we didn't ask to be attacked on 9/11. This may open a "whole nother" can of worms, but a big chunk of Bush's spending is a result of being attacked, on our own soil, by people that hate us and want to destroy us. Other than that, I can't think of much else Bush did that I agree with, conservatively, unfortunately.

  • outside_chance Jun 12, 2009

    MakoII wrote: "For those of you who want cold hard numbers of the budget blame.....".

    That is a fair assessment. The only Caveat is that a 2009 projecting done in 2001 has a bunch of assumptions on the economy which is speculative at best. That said, one of the biggest failures (in my opinion) of the Bush presidency AND the congress that accompanied that presidency was that they made good on tax cut promises, but did NOT reduce spending.

  • outside_chance Jun 12, 2009

    Mako, I actually think we are agreeing more than disagreeing on this.

    I'm not saying that every area should have the same amount of cuts, but a responsible budget has to be set for each area of spending (which requires leadership in our government as you state). Once those budgets are defined, the department heads need to be responsible enough to figure out what cuts make the most sense to meet their budget. If they can't do that, then they don't belong in that job.

    The examples you are giving are similar to what you stated each department does. You gave examples that you know everyone would say "You can't cut that". But there are still options to cut those budgets. For example, how about temporarily making more substantial cuts in school administrator's salaries?
    Re: food inspections. I don't a lot about that dept, but I am sure that 5-10% reduction can be made without risking the safety of our children.

  • Tolip Jun 12, 2009

    Some of this reminds me of of my Grandfather's favorite saying about the Christmas Goose!

  • Tolip Jun 12, 2009

    My rep has voted with the Majority something like 97% of the time. I doubt he even read my letter!

  • MakoII Jun 12, 2009

    For those of you who want cold hard numbers of the budget blame:

    IN 2001 when Clinton left office the CBO projected 2009 would have a surplus of 861 Billion. Now the CBO figures to have a 1.2 Trillion deficit. A delta of plus two trillion dollars.

    The percentages work out:

    Lost revenue due to economic down turns in 01 and 07 - $770 Billion = 37.4%

    Bush Policies (lost revenue/increased spending/07 Stimulus) = $673 Billion = 32.6%

    Bush Initiated events continued today: 2 wars/Bailouts = $417 Billion = 20.2% Obama Stimulus = $ 145 Billion = 7.1% Obama Program (tax cut/spending) = $56 Billion = 2.7%

    After that the percent of the CURRENT 1.1 Trillion in debt looks like this: Bush Policies (less 07 Stimulus)= $627 Billion = 57% Bush spending continued by Obama (2 wars) = $232 Billion = 21% Bailouts started by Bush and continued y Obama = $185 Billion = 17% Obama Spending = $56 Billion = 5%

  • MakoII Jun 12, 2009


    There are some problems to the "just cut your budget" approach, and even to Perdue's "Across the board" even-steven cuts.

    Take Education? If busing is mandated by law, you can't cut it. The legislature has to change the law. If classroom instruction hours are mandated by law, you can't cut that either. If you are holding schools accountable to their testing as they currently are, how can you hold them accountable but cut their support services, staff and admin?

    Same with hospitals. How do you cut services, equiptment, or furlough doctors and nurses? You have to stop treating people.

    How do you cut disease control? Cut meat, dairy, and food in general inspection? "Oh, we're going to stop checking meat for bacteria" just doesn't cut it when kids and old people start dying from bad hamburgers.

    Cuts should be done, but the current approach is stupid, and devastating. It need measured thinking, it needs leadership, both which this state lacks.

  • mxteam44 Jun 12, 2009

    "Call your legislators-threaten them with never voting for them again" - tgw

    I did! The response I got was...."After looking at the devastation additional cuts would bring, I'm convinced this is the best way to go".

    I sure scared him with my -1 vote threat! Sheesh! Face it, they don't care what we constituents think!

  • Garnerwolf1 Jun 12, 2009

    Tell that to the state agencies where paper is being locked up at night, and people are being told not to print or copy, because no more purchases can be made.

  • tgw Jun 12, 2009

    Throw the bums out-no wait-keep the cards and letters coming and going. Call your legislators-threaten them with never voting for them again-

    All tax bills must be voted on 3 times-yes 3 times. Bug the he.. out of them. Maybe we can turn this around if enough of us make pointed calls.