State News

House not ready to look at stopgap budget

Posted June 23, 2009
Updated June 24, 2009

— The state Senate has approved a stopgap spending measure for North Carolina state government if budget negotiations with the House don't wrap up before July 1.

The Senate agreed Tuesday to approve Senate Bill 311, a so-called "continuing resolution," to allow government to keep operating past the end of June without a final budget in place.

"It's better to be safe than sorry and better to do it when you're not under tremendous pressure," Senate Majority Leader Tony Rand said.

Money generic, dollars Hopes fading for new budget by July 1

The bill orders Gov. Beverly Perdue to keep spending levels at no more than 85 percent of what was allocated in the past year's budget because lawmakers are reducing spending due to declining tax collections.

The temporary spending plan prevents any pay increases for state workers, such as automatic step increases, from taking effect unless authorized by the General Assembly.

The temporary spending plan is unusual on two counts: It includes no expiration date, and the Senate rolled it out early – a week before the fiscal year ends. The latter point signals the large differences between the House and Senate on the two-year spending plan and the fading hope that a budget can be approved before July 1.

House members, however, said they want to continue working on the budget in the final week of the current fiscal year and don't yet want to consider the Senate's continuing resolution.

"The House would prefer not to do a continuing resolution. We'd prefer to get the budget done," House Majority Leader Hugh Holliman said.

Holliman, D-Davidson, also said House leaders want an end date on any temporary spending plan.

Continuing resolutions traditionally have expired after two or three weeks, forcing lawmakers to pass another temporary plan if they haven't completed the budget in that time.

"It doesn't need to go on forever," Holliman said of the Senate's continuing resolution. "We need a time limit. We need to put some sense of urgency into our process."

Rand, D-Cumberland, said lawmakers should focus on finalizing a budget without the need to adopt successive continuing resolutions.

"I think we’re better off spending our time trying to resolve all this, and when we’re through, we’re through,” he said. "I don't know anything you could do to increase my sense of urgency. Putting a date in (the continuing resolution) certainly won't."

The dispute over the stopgap spending plan pales in comparison to the budget standoff between the House and Senate, but it has left political observers shaking their heads.

"It makes you wonder how long this sort of standoff with the negotiations will continue," said Stephen Jackson, a public policy analyst with the N.C. Budget and Tax Center.

Although House and Senate negotiators have agreed on extensive cuts to education and human services – the two largest pieces of the state budget – they remain far apart on the revenue side of the equation.

Perdue in recent days has urged lawmakers to raise $1 billion to $1.5 billion in new taxes to avoid drastic cuts to education.

House members want to use a quarter-cent sales tax increase and higher income taxes on couples making more than $200,000 a year to generate most of the additional revenue. Senate Democrats have balked at the idea of higher sales and income taxes, however. They want to lower the sales tax and begin taxing a range of services, from car repairs to lawn care to home improvements.

"It's just a process we need to go through and certainly is a give and a take. Sometimes, it takes a little time to get that done," Holliman said.

The state Department of Revenue could generate an additional $150 million for lawmakers to work with in the next six months by resolving some corporate tax cases, Revenue Secretary Ken Lay said.


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  • jsanders Jun 25, 2009

    I know they're too busy arguing over which taxes to raise to care about ways to reduce spending, but there are budget ideas out there that would solve the state budget problem without hiking taxes and making things even worse for families socked by the recession:

  • Stormy13 Jun 25, 2009

    Does anyone else wonder how cities like Cary, Durham, and yes, even Raleigh, have already passed their budgets? SIMPLE - they spent less, not more! Why can't the State of NC follow their example and get by on less? Where is it written that the budget has to be INCREASED each year? I know one thing, I wouldn't want to be any of these guys/gals coming up for re-election, including the gov.!

  • MakoII Jun 25, 2009

    The FIRST step to plugging the budget gap is to not get Per Diem payments for going over June 30th deadline.

    Who can possibly have respect for Legislature when they rarely pass a budget on time and continue to milk the taxpayers for loafing around, even when they don't physically show up.

    Get 'er done!

  • SilverWolf Jun 25, 2009

    I love all these comments about taxing smokes and alcohol. My guess is the majority of you don't consume these products in any serious amount. While I am not a drinker, I was a smoker until the second to last tax increase on them. I quit. Want to know why? Because I refuse to pay the state of NC any more tax. A lot of the people I know are also quitting for the same reason. Bottom line, there goes your extra income right down the drain. You have raised nothing for the state and in fact, now there will be less because of those of us who have stopped using the products that carry such ridiculous taxes. Here is a novel idea for Bev. How about taxing all the golfers who come to NC. Tax them on tee times and for the use of golf carts. Tax them double for each ball they hit out of bounds. That will raise a buck or two for Bev's treasure chest. hahahaha

  • Timetogo Jun 25, 2009

    yes, I do realize THEY aren't the one's charging more for the water but just get the point.. don't nit-pick!

  • Timetogo Jun 25, 2009

    OH YEAH.. and quit the food and health care for ANYONE without a citizenship or in process to GET one... (but don't hold your breath.. aint looking like anyone has the walnuts to make that part happen!)

  • Timetogo Jun 25, 2009

    slap the extra tax on beer and wine and since we can't smoke anywhere anymore, might as well kick in another 10 cents on that too.. But leave the lawn care alone!! You're already killing us by charging more for city water!

  • louise46 Jun 24, 2009

    May I suggest that the Senate and House stop the standoff and compromise by accepting some taxes wanted by each chamber - each side giving up something they want. The very idea of waiting to fix this budget while school administrators wonder how to figure what budget they have to run their school systems makes no sense to me. If we want services, we must pay taxes. Please don't dodge this tough decision. Continuing unemployment means less for all as the commerce of our state is a connected chain. Educating our children and human services make all our lives better in the long run. Jeanne Allen

  • shep8851 Jun 24, 2009

    Could it be that our Honorables are taking a sneak peek at what would happen to our budget if the entitlements and give-aways to the illegal aliens would stop??? Might surprise a bunch of folks...

  • miseem Jun 24, 2009

    I bet attorney fees and accountant fees are not included in the senate recommendations on what to start charging tax on.