North Carolina State Transportation Secretary Gene Conti defended the recent Southeast High-Speed Rail Corridor proposal by claiming that North Carolina has a “good chance of winning some of the $8 billion in federal economic stimulus funding allocated to fast trains.” Conti continued, “North Carolina would be one of the most profitable venues for high-speed rail, [and] people are starting to see that [our] corridor would generate the most revenue.
Did you see the major theatrical presentation put on by state leaders in Raleigh over the last several weeks? The script was brilliantly followed, but the plot was a bit predictable.
Small business owners from across the state gathered Monday for a roundtable discussion in Cary to discuss ways to fight the so-called “Amazon” tax from being inserted into next year’s budget bill. The tax actually refers to a little-discussed proposal tucked away in the Senate budget proposal that would enact taxation of Internet sales in North Carolina made by companies that pay commission to “agents” in the state who refer Internet shoppers to the company’s products. The new tax has been dubbed the Amazon tax because Amazon.com is perhaps the most recognizable on-line retailer that would be affected.
According to analysis, for every dollar of actual year over year spending cuts, the House proposes $2.56 of tax and fee increases. House budget makers have often repeated the phrase “balanced approach” to describe how they crafted their fiscal year 2009-2010 budget proposal. Indeed, a mix of spending cuts and tax and fee increases are included in the House plan. A look at the numbers behind the rhetoric, however, calls into question the House’s definition of “balance.”
The North Carolina House budget proposal for fiscal year 2009-10 will raise taxes and fees by more than $860 million and spend roughly $19.97 billion. The spending amount is down from the projected $20.3 billion being spent in the current fiscal year. Looking back further, however, the House spending plan would mark a five year spending increase of 25 percent, with $4.05 billion in new spending introduced since FY 2004-05.
Part of the North Carolina House’s proposed tax package would raise North Carolina’s highest marginal tax rate to 8.5 percent. The new rate would be tied for the 7th highest top marginal rate in the nation, and put North Carolina’s top marginal rate head and shoulders above other top rates in the Southeast.
When the North Carolina House Budget proposal was originally released, many lawmakers claimed the “draconian” and “painful” cuts were unavoidable without tax increases. Among the proposed cuts were teacher positions, care for the elderly and developmentally disabled. A closer examination of budgetary items not on the chopping block calls the House leadership’s priorities and motives into question.
North Carolina lawmakers need to question the wisdom of imposing job-killing tax hikes in order to spare the organization that funded the Randy Parton Theatre and Drag Racing Hall of Fame. In light of the highly unpopular tax increases currently under consideration in the North Carolina General Assembly, now appears to be a good opportunity to revisit a proposal that would make more than $550 million in funds available immediately to budget writers: dissolve Golden LEAF.
In today's News & Observer article House panel OKs taxes Speaker Hackney made some regrettable remarks concerning yesterday's tax and budget fight in the finance committee. He said that the Republican claims that there is a much lower "shortfall" than the Democrats' claim of $4 billion is a "fraud." He said we Republicans won't vote for spending cuts and we won't vote for tax increases. He said that we will not do our constitutional duty to balance the budget.
One of the most significant budget battles taking place in the General Assembly this year involves K-12 education. This year most of the budget discussion revolves around how to manage next year’s education budget shortfall, which is currently hovering around $930 million.
Substantial payroll cuts for state workers in the upcoming budget are likely unavoidable, according to the latest budget analysis by the Civitas Institute.
The release of updated revenue estimates provided by the General Assembly’s Fiscal Research Division brought more bad news to state budget makers: projected revenue estimates for the coming fiscal year are being revised down by another $1.3 billion. Compared to the recommended continuation budget, the state is now facing a projected $4.6 billion deficit for FY 2009-10. The new projection estimates revenue for the coming fiscal year to be $17.5 billion, down from the $18.8 billion revenue estimate used by the Governor and Senate when crafting their budget proposals.
UNC President Erskine Bowles says Gov. Bev Perdue’s recommended $165 million in budget cuts will be a bitter pill for the state’s public colleges and universities to swallow. While the cuts to the UNC System’s $2.5 billion budget are significant, they aren’t deadly. The impact of the cuts can be softened by additional savings gathered from a thorough review of existing programs and policies.
The Senate Finance Committee’s tax “reform” plan would result in a substantial tax increase on North Carolinians. By the committee’s own estimates, state and local tax hikes would total $1.7 billion over two years. Labeled the “21st Century Tax Rate Reduction and Modernization Plan,” the Senate’s proposal includes perhaps the most drastic changes to North Carolina’s tax structure in 70 years. While many of the specific alterations are worthy of praise, the significant net increase in North Carolina’s tax burden is troubling.
The NC House is currently considering HB 148, a bill that would allow six urban counties to levy a ½ cent sales tax increase and all other counties to levy a ¼ cent sales tax increase in order to support public transportation. The bill is offered under the guise of congestion relief, but is actually a massive tax increase that will have little to no impact on reducing congestion.