Budget approaching final days?

August 4, 2009 5:34:52 PM PDT
While legislators comb over the details, citizens are waiting to see how much it will ultimately cost. Taxes are likely going up for everyone living in North Carolina.With the budget shortfall at $4.7 billion, lawmakers are helping to balance the bill with a proposed $1 billion in new taxes.

Governor Bev Perdue has said all along taxes should not take their toll on working class families.

"We don't unfairly raise taxes on working families," Perdue said.

So far Perdue hasn't specified who the working class is.

But some say the 1 percent increase in sales tax could hit lower income earners the hardest.

On top of that, there's an income tax surcharge of 2 percent which hits people making over just $60,000 a year, and $100,000 for joint filers.

"I haven't heard any complaints from her on it, yet," Michaux said. "So evidently, she's somewhat satisfied over what's going on."

Some working residents subject to the tax say they understand.

"Of course I don't want to pay more, but I recognize the necessity." resident Dick Boulden said. "We're in a hole. The idea we could get out of it without sacrificing something is irrational."

"Everyone has their opinion of what they think working class is and it affects everyone a little bit differently," resident Chad Parker said. "But the reality is we have to raise revenue somehow to cover this deficit we all have to pitch in and obviously those who make more should have to pitch in a little bit more those who don't make as much should be penalized, but what's deemed as working class."

Other taxes are also on the drawing board.

There's a $0.10 increase for a pack of cigarettes, a $0.5 tax hike on a six-pack of beer and a $0.4 tax hike on a bottle of wine.

And there's going to be more vigorous collection of sales taxes on internet transactions.

The proposed budget would also bring big cut to schools, which Perdue had initially tried to fight.

Lawmakers appear to have agreed to more increases in class sizes in grades four through 12 by two students per class.

They had agreed last week to not touch class sizes in grades kindergarten through five. But then over the weekend, they agreed more children could fill fifth and sixth grade classrooms, given the current budget shortfall.

It means hundreds of millions of dollars saved, but also about 3,400 teaching jobs lost.

Two weeks prior, Perdue threw lawmakers for a big surprise by saying a tax compromise worked out over the last month was not good enough.

Now they are assuming she will support raising class sizes.

Officials also point out school districts will have the power to keep smaller class sizes if they can make up the cuts in other areas.

The state budget could be approved as early as Wednesday.


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