Senate budget in need of reality check
Published 12:00 am Tuesday, May 10, 2005
Get ready to dig a bit deeper into your pockets.
Last week, the North Carolina Senate approved a $17 billion operating budget for the state during 2005-06.
Given the fact that state leaders have been crying &uot;deficit&uot; over the past few years – the new budget is, in a word, bold.
To help pay for items such as a Center for Craft and Design at UNC-Asheville, hand over dollars to a liberal research center at UNC-Chapel Hill and give tax money to global-warming activists, our elected leaders in the State Senate, instead of exploring alternative revenue streams, have opted for tax increases.
Smokers will pay more for their habit thanks to higher cigarette taxes (estimated to generate $201 million). State income taxes are proposed to increase by $20 million. Estate taxes (the &uot;death tax) will go up by $31 million. Expansions to existing sales taxes will add $95 million to the state’s coffers while another $413 million will come from a Senate decision to make a temporary half-cent sales tax into a permanent fixture.
Additionally, state citizens will pay more for their driver’s license, receive copies of their driving records and to renew vehicle registrations. Those three items will generate a combined $92 million in additional revenue.
Meanwhile, we keep hearing of the state’s financial hardships. If that’s the case, then why does the NC Senate consider it necessary to increase General Fund spending by $1 billion? The answer is simple; they can do so by raising taxes.
Tax increases are not a bad idea when the funds they generate go towards much-needed programs, such as education. However, Senate leaders are hoping that a lottery will address the educational needs in our state. While waiting for the first set of winning Lotto numbers to appear, the Senate slashed $63 million from the budget by eliminating some teacher assistant positions and administrative staff.
The Senate budget also proposes eliminating the current Public School Capital Expense Fund, which each county receives based on its Average Daily Membership in the public school system. They wish to create a new entity, the County Assistance Fund, that would receive $150 million annually from state lottery proceeds, beginning in 2007-08. For 2005-06, the Senate budget directs that $70 million of lottery proceeds go to the existing ADM fund to help counties pay for school facilities.
That’s an extremely bold maneuver, considering the lottery has not yet been approved.
Additionally, the Senate refused to ease the Medicaid burden now placed on the 100 counties. In poor, rural areas such as the Roanoke-Chowan region, Medicaid consumes upwards to 33 percent of every property tax dollar. That forces county leaders to find creative ways to invest more money into public schools and law enforcement.
In more times than not, it’s the Medicaid burden that forces county leaders to increase property taxes. Coupled with the increases coming from the Senate proposals, you may find yourself a lot &uot;lighter on the hip&uot; beginning July 1.