Perdue suggests sales tax increase

July 7, 2009 10:03:13 PM PDT
On Tuesday, Governor Bev Perdue proposed a big increase in the state sales tax to fill what she called a $4.7 billion shortfall. However, Republican leaders said the governor was exaggerating the budget deficit.

Republicans claimed Perdue was comparing apples to oranges when it came to what was budgeted for the state and what was actually spent.

House Republican Leader Skip Stam of Wake County said Tuesday the gap was closer to $1 billion, not over $4 billion as the governor had stated.

He said Democrats were starting with what was budgeted for this year, instead of the lower amount of what was actually spent.

"If you can exaggerate that four-fold then you can inspire people with fear and terror to vote for higher taxes," Stam said.

But Democrats denied the claims.

"The idea that budget writers are trying to scare up the budget is simply false," a spokesman for House Speaker Joe Hackney told Eyewitness News. "There are over $2 billion in cuts being discussed that are very real and will affect people especially in human services and education."

For the last two weeks, Democrats in the General Assembly had agreed to raise just under $1 billion in new taxes.

Then last week, the governor said she wanted a quick compromise. But now, with the budget six days late, Perdue said she wanted her fellow Democrats to simply compromise on ways to increase taxes and pass a spending plan.

"Last week she said she really didn't care about which taxes got raised," Sen. Phil Berger said. "She tried to clarify that through her spokesperson. But we don't know where she stands."

On Tuesday, Perdue said $1 billion in tax hikes were not enough.

"It takes about $1.5 billon to do what has to be done for public schools and the services of this state," Perdue said.

So she presented what she called a pathway to save vital services, with $1.6 billion in new taxes.

Half the total would come with an "emergency 1 percent sales tax increase," which would expire in a year. Though it's only supposed to be temporary, the last time it was in place, it stayed active for six years.

"If the Democrats were holding open meetings at the present time, where votes were being taken and decisions were being made in the open, then we probably wouldn't need something like this," Berger said.

Stam also took issue with the fact that only a handful of Democrats from the House and Senate were working out the budget details.

"We're not privy to those discussions, Stam said."That's Democrats talking to Democrats which are like wolves deciding who will take care of the lambs -the taxpayers."

But some taxpayers said talk of raising the sales tax to the cigarette tax was too much to stomach when money is already tight.

"Let me keep my money in my pocket," taxpayer Matt Finley said. "I pay my taxes every year. Let me keep what little money I have."

The debate over the budget will continue on Wednesday.


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