Local Politics

Lawmakers to unveil budget deal

Posted August 3, 2009 6:36 a.m. EDT
Updated August 3, 2009 11:32 a.m. EDT

— North Carolina lawmakers on Monday night will lay out the details of what they hope will be the final draft of a two-year budget, 34 days after a plan to run state government was supposed to be in place.

The $19 billion spending plan would protect class sizes in some grades and preserve thousands of teaching jobs – at the cost of $990 million in new taxes. The state would also spend an additional $1 billion in federal stimulus funds.

More details – such as how many hundreds of state positions would be eliminated – were expected to be provided later Monday when the finalized budget  bill is released.

The first of two required votes on the final budget bill in each chamber could come as early as Tuesday. Gov. Bev Perdue will then be asked to sign the bill into law if it passes.

Seven weeks of negotiations among legislative leaders and Perdue swirled around the amount of new taxes and public school spending cuts.

The budget agreement, reached Friday, would hold the line on classes from kindergarten through sixth grade but would allow local school districts to possibly make cuts in grades 7 through 12. Schools could hire more teachers using use other pots of money, such as state money for textbooks.

The agreement includes a one-cent increase in the state sales tax, raising it to 7.75 cents in most counties.

It would impose a 2 to 3 percent surcharge on the income tax liability owed by individuals with a state taxable income of $60,000 or more and couples with a state taxable income of $100,000 or more. Those taxpayers would either owe more in April or get a smaller refund.

Consumers would also pay higher taxes on tobacco and alcohol, while the state would claim a bigger share of alcohol taxes, holding onto some money previously distributed to municipalities.

Other measures in the budget proposal include:

  • closing seven small or aging prisons, leaving open an eighth threatened with closure in Haywood County. Lawmakers said many correction officers would find work in nearby prisons.
  • closing the Samarkand Youth Development Center for female delinquents in Moore County but keeping open the Dobbs Youth Development Center in Lenoir County.
  • keeping in place a program that discounts university athletic and academic scholarships for out-of-state residents, with taxpayers picking up the difference.