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 House passes $18.6 Billion budget

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Join date : 2009-04-22
Posts : 240
Location : Piedmont NC

PostSubject: House passes $18.6 Billion budget   Sun Jun 14, 2009 2:42 am

House passes $18.6 Billion budget

RALEIGH -- The state budget approved early today at the House provides residents the first real look at how deeply the recession may affect services and programs across North Carolina.

The House passed the bill 64 to 54 on its first vote about 11:30 p.m. The chamber then took a final vote after midnight on the $18.6 billion budget that includes $780 million in new taxes. It passed 64 to 53, sending the bill to the Senate. The budget also includes some $3 billion in cuts to programs that were funded in the current year's budget. The cuts are offset by $1.3 billion in federal stimulus money. Those funds disappear in following years, effectively pushing the deficit forward.

That proposal dwarfs cuts proposed by Gov. Beverly Perdue and the Senate; they advanced budget proposals before revenue dropped precipitously.

The House would cut thousands of teacher jobs to raise class sizes from fourth grade through high school. It would reduce funding to a host of social services and close eight small prisons. It would raise university tuition and reduce financial aid programs. It would reduce funding for group homes and early childhood programs.

"We've gone to the brutal level," said Rep. Hugh Holliman, a Lexington Democrat and the House majority leader.

House Republicans have tried to weaken or erase the tax increases, and criticized Democrats for whipping up fear about devastating budget cuts to build support for new revenue.

"They say you're voting against cuts and advocating for putting teachers out of jobs. I say hogwash," Rep. Thom Tillis, a Cornelius Republican, said Friday night. "There is hundreds of millions of dollars that could be cut without harming citizens."

Rep. Curtis Blackwood, a Matthews Republican, received this week an unsigned, scrawled letter from a third-grader, who also drew a crying stick-figure girl and asked that no teachers be fired.

Protests and lobbying blitzes by groups and constituencies that would feel the budget cuts have been a frequent occurrence at the General Assembly as the budget vote neared.

Democrats, who control the House, have said their tax proposal would mitigate the worst cuts. Someone has to cope with the deficit, said Rep. Rick Glazier, a Fayetteville Democrat.

"Governing requires us to do that. It doesn't give us the ability to cop out of the tough decisions this time," Glazier said.

Rep. Paul Stam, an Apex Republican and the House minority leader, said the state could find better ways to cut, such as ending millions of dollars in incentives to lure companies. The taxes are not necessary, he said.

"Don't say you're going to do it because you had to. It was a choice," Stam said.

The budget would increase the statewide sales tax by a one-quarter of 1 cent. It also would apply the tax to new items, such as digital downloads of music or ringtones. It would tax repairs and maintenance to a car, and courier services such as FedEx. It would increase the income tax on the state's wealthiest residents and apply a tax to limited liability companies.

"People who are going to pay more taxes are going to have better schools for their children," said Rep. Deborah Ross, a Raleigh Democrat.Once the House adopts a budget, a compromise must be negotiated between the House and Senate. After that compromise, Perdue must sign the budget.

Last edited by Damocles on Sun Jun 14, 2009 3:03 am; edited 2 times in total
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Join date : 2009-04-22
Posts : 240
Location : Piedmont NC

PostSubject: Re: House passes $18.6 Billion budget   Sun Jun 14, 2009 3:00 am

Proposed NC House tax package at a glance

The Associated Press

Thursday, June 11, 2009

RALEIGH, N.C. — The proposed tax package added Thursday by the House to its now-proposed $18.6 billion state budget on a 64-52 vote, with details on changes and a breakdown of the $784 million in additional revenues expected to be generated for the 2009-10 fiscal year:

— create new individual income tax brackets of 8.25 percent (for taxpayers making above ranges from $100,000 to $200,000, depending on filing status) and 8.5 percent (for taxpayers making above $250,000 to $500,000, depending on filing status), compared to the current 7.75 percent: $256.7 million.

— require multistate businesses to file income tax returns designed to ensure in-state profits placed in out-of-state subsidiaries are taxed: $18.5 million.

— raise sales tax that most consumers pay in nearly all counties from 6.75 percent to 7 percent: $195 million.

— apply sales tax to cover warranties, installation and repairs: $176.2 million.

— apply sales tax to local and interstate courier services that deliver parcels: $25 million.

— apply sales tax to music, movies, books and other items purchased and distributed on the Internet, as well as transactions involving other Internet sales: $13.2 million.

— convert 1 percent franchise tax on movies and 3 percent on athletic events and other amusements to the full sales tax: $23.6 million.

— require limited liabi lity businesses to pay corporate franchise tax: $59 million.

— change corporate income tax rules involving sales of property and interest expense deductions for banks: $8.5 million.

— increase liquor tax by 1.5 percent: $8 million.


Source: North Carolina General Assembly's Fiscal Research Division.
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