Senate's Budget Plan Presents a Tough Sell

05/05/2005
Greensboro News and Record
Editorial

THE $17 BILLION SPENDING PLAN CONTAINS A LOTTERY, CONTINUES A SUPPOSEDLY TEMPORARY SALES-TAX INCREASE AND LOWERS THE LEVY ON HIGH INCOMES.

The N.C. Senate has not produced a hold-the-line budget. Anything but.

It redraws lots of lines - on taxes, spending and public policy issues. Some of its initiatives are good, others not.

Budgets pass when a majority finds more to like than dislike within its pages. This one is a tough sell.

The $17 billion plan raises state spending by about $1 billion. That's a 6 percent boost, which doesn't seem unreasonable when balanced against the state's population growth, increased school enrollment, greater demands for post-secondary education, escalating medical costs and the need to grant modest pay hikes to teachers and other state employees.

Critics say the budget is loaded with pork-barrel funds. That's a matter of perspective. Allocations of $2.2 million for the furniture market and $5 million for the UNCG and N.C. A&T; millennium campus can be seen here as wise investments in Guilford County's economy. Maybe the money going to other parts of the state should be viewed as wasteful spending.

The budget's authors found $800 million in new revenues, but they also threw in some tax cuts. The mixture favors the wealthy, who will realize a drop in the top income-tax rate, and businesses, which will reap a reduction in the corporate income tax. Meanwhile, a sales-tax boost enacted in 2001 and scheduled to expire this year will be made permanent. That represents a 1 percent hit on the shopping budgets of everyone in North Carolina, including people who are out of work or otherwise facing financial difficulties.

Many other tax increases also are proposed, raising the cost of phone service, satellite TV, some driver's licenses, vehicle titles and registration and other items.

The largest tax hike will be beneficial, however. The budget raises the cigarette tax from a nickel to 40 cents per pack. That will generate revenue for the state but also discourage young people from smoking.

The Senate's budget includes the lottery, a move intended to avoid a separate vote on North Carolina's foray into state-sponsored gambling. Unlike the lottery measure already approved by the House of Representatives, this version anticipates use of some lottery revenue to supplant rather than supplement existing school-construction funding.

Although it has nothing to do with budgeting, another provision in the bill would ban video poker. That was thrown in to give opponents of gambling a chance to claim a victory even if they vote for a budget containing a lottery.

The budget is on a fast track in the Senate, but it would be a better package without a lottery, with a lower sales tax and without the tax break on high incomes. No one can like everything in a $17 billion bill, but this one has a lot to dislike.

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