Governor calls for tax increase

RALEIGH Lawmakers are trying to bridge a massive $4.2 billion budget gap. So far, the Legislature has only proposed drastic cuts to schools and health and human services agencies.

Schools, from kindergarten to universities, would be cut 11percent. Class sizes would go up by 2 children per classroom, and UNC tuition would jump $200 per student.

But, the poor, elderly and disabled would be the hardest hit. The House would cut the health and human services budget by 30 percent.

And so far, they would not raise any taxes.

"In the economy that we're in right now, it would be ludicrous to go out and try to cover our shortfall with more taxes," offered Rep. Mickey Michaux (D) Durham.

But the Governor is advocating a more balanced approach. She proposed a very different spending plan three months ago, when the budget shortfall was a billion dollars less than it is now.

"We cannot do what we want as a people with cuts alone. I thought that way in March. I still think that way," she told reporters Thursday.

Perdue proposed higher taxes on tobacco and alcohol, and her education czar has since floated ideas of higher sales taxes. But Perdue makes no commitments on cuts she will not accept.

"I'm not going to get in the game of threatening to veto or what I will or will not sign," she said.

Republicans vow not to support any budget with any tax increase.

Still, after several protests by teachers and social service groups who would feel the deepest cuts, the anti-tax stance may be softening.

"The cuts are very deep and I think there's a feeling among the membership that we should begin having a discussion about the possibility of a revenue plan," explained Rep. Paul Lubke (D) Durham.

The new budget year starts July 1. But, lawmakers in the past have not passed budgets on time. This time, the shortfall is so large that delaying the cuts would compound the shortfall

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