State News

House votes in favor of budget proposal

Posted June 12, 2009
Updated June 13, 2009

— The state House gave tentative approval Friday night to an $18.6 billion budget for state government next year that imposes higher taxes added by Democrats who argued they're necessary to avoid crushing spending cuts.

Lawmakers agreed to the spending plan in largely party-line votes of 64-54. Republicans argued unsuccessfully it should have never required a $784 million tax package because the shortfall is exaggerated and would delay North Carolina's economic recovery.

The second and final vote came just after midnight. Passage allows House and Senate Democrats to begin negotiating a final two-year spending plan in earnest next week. The Senate passed a budget bill in April.

house vote 6/12 House meets for budget vote

But Democrats who largely drew up the plan said losses to education and health care would have been too devastating to the state without the extra taxes. The plan reduces but does not eliminate those losses.

"In order to really provide services that we need, it is necessary sometimes to look at some increase in revenue," Rep. Mickey Michaux, D-Durham, senior co-chairman of the House Appropriations Committee, said during a three-hour debate that culminated with a vote at 11:35 p.m.

“We’ve put together a plan that’s about 50 percent cuts, about 30 percent recovery act monies and about 20 percent increased revenues,” House Speaker Joe Hackney, D-Orange, said prior to the vote.

The package would raise the sales tax by a quarter-penny so that most residents would pay 7 percent. It would also add two new marginal income tax rates for the wealthy and create or raise taxes on liquor, movies and digital downloads.

The extra revenues still won’t prevent elimination of funding for several thousand state employee and teacher positions, as lawmakers have watched a drop in tax collections accelerate this spring.

With one month to go in the fiscal year, revenues are down $1.7 billion — an unheard of 10 percent decline compared to last year, according to the Office of the State Controller.

House Minority Whip Thom Tillis, R-Mecklenburg, said Democratic leaders have failed their duty by forcing citizens to pay more for taxes while failing to prioritize spending. He accused Democrats of scaring citizens needlessly by proposing spending reductions that were restored by a tax package unveiled earlier in the week.

“Everybody in the state of North Carolina needs to be worried about this budget,” he said. “They’re trying to make us feel good about taking back things they never should have taken away.”

Democrats shot back that Republicans have done nothing but complain and have failed to make tough decisions in budget subcommittees.

The proposed House budget bill would still increase class sizes on average by two students beginning in fourth grade to save $184 million, or funding for 3,400 teachers. Eight prisons and a juvenile offender facility would be closed, and there would be no raises for teachers, state employees and retirees.

The University of North Carolina system would raise tuition by a maximum of $200 and face $263 million in cuts, or a nearly 9 percent reduction.

But the tax package eliminated $75 million in additional cuts for UNC and restored dozens of other cuts including funds for at-risk public school students, while keeping class sizes at current levels in kindergarten through third grade.

The bill also raises money to balance the budget by taking $270 million from other dedicated pots of money and $88 million in new and higher fees, including an additional $350 fine for motorists traveling 25 mph over the speed limit or driving while impaired.

The budget also gets balanced with $1.3 billion in federal stimulus funds next year, but Democrats warned that such money would be gone by late 2011.

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  • Bendal1 Jun 15, 2009

    TN balances their budget because they don't have the rapid population growth of NC, they don't maintain a fraction of the roads that NC does, and they are a smaller, more rural state. They've also got a higher state sales tax plus county/city sales taxes, tourist/hotel taxes, and some counties have high property taxes on top of all of that.

  • mrmud4x4 Jun 15, 2009

    d1 standing - what does King George (dubya) have to do with the state of NC being unable to keep a balanced budget? TN has kept a balanced budget. You socialists blame Bush for everything.....it's get'n real old.....

  • d1_standing Jun 12, 2009

    Why is so many people so concerned about paying higher taxes. Didn't you enjoy the tax break that Bush gave for over eight years...??? Regardless of how you cut it, we are going to have to pay for services. We will have to pay for the mentally challenged either through advocacy for services/support or pay for them in prisons. We need schools, teachers and law enforcement, so what is the problem?

  • larieke Jun 12, 2009

    DontAnnoyMe, Ok, $800 Mil divided by 9 Mil people in NC equals $88.89 per person per year, divided by 12 months equals $7.41 per person per month. And we all know that new taxes never go away. Therefor we will be paying on $800 mil the rest of our lives. I hope the math clears it up for you.

  • d1_standing Jun 12, 2009

    Retroconsultant,
    The reason why democrats are seemingly taking over corporations and dictating who and how they should be ran is due to the fact that they received huge sums of our money. Don't forgot these are the same corporations when left to their own devices during the days of Bush, found it necessary to disregard their better judgement and lend, lend and lend some more. This was all done in the name of greed without restraint--a republican mantra. Drastic measures have to occur to undo the eight years that Dubya, dismantled everything that made this nation strong--international credibility, financial strength, respect for military and equality. So yes, it is time to pay taxes.

  • DontAnnoyMe Jun 12, 2009

    "Every person EACH will have to pay $7.50 per month, every month, for the rest of their lives."

    Where'd you come up with that?

  • ncsufamily24 Jun 12, 2009

    teachernc:
    "If the Republicans had stayed in office we would all be in bread lines by now."

    And if the Democrats continue forward with their economic game plan......there won't even be bread lines to stand in. You Democrats are so predictable.

  • 5Rs Jun 12, 2009

    "If the Republicans had stayed in office we would all be in bread lines by now." - teachernc.
    Wow, you don't get it. That is the goal of the Democrats - total control over your life. Equality by ensuring everyone is poor and dependent on the government. We now have major corporations being taken over by the government, government control of executive pay, our president trashing our country, excessive borrowing destroying our children's future, and you think the Republicans were bad?

  • 5Rs Jun 12, 2009

    typical of the Democrats: Dither around, identify high priority funding needs, ignore low-priority items that should be eliminated, and say we need more money to fund important stuff. eight hundred million is roughly 200 dollars per working person, out of our pockets into the political grab bag.

  • Just the facts mam Jun 12, 2009

    Time to "throw the bums out!!!"

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