Governor’s budget includes sale tax hike
RALEIGH – Gov. Bev Perdue wants to invest additional funding into education, jobs and military families and veterans.
As expected that investment comes with a price.
Thursday morning the Governor presented her 2012-13 budget for “Investing in Our Future” – a plan to guide North Carolina toward expanded economic growth and opportunity for its citizens. The $20.9 billion plan includes a three-quarter cent hike in the state sales tax, a proposal that the Republican controlled General Assembly is already taking aim to overturn.
“This budget invests in the priorities that all North Carolinians share,” Gov. Perdue said in a press release. “We must strengthen our ability to educate and prepare North Carolina’s children for the future. We must make concrete investments to help companies create jobs and we must stand up for our military families.”
On the other side of the political aisle are the Republicans. One of their leaders, Senate President Pro Tempore Phil Berger (R-Rockingham), said the Governor’s proposed tax hike, one expected to generate $850 million annually, comes at a bad time.
“Governor Perdue’s budget would force North Carolina families and businesses to pay nearly $1 billion in new job-killing taxes,” Berger said. “This could shatter our fragile economic recovery. We must break state government’s habit of throwing money at problems and adopt innovative solutions and meaningful reforms. The cycle of irresponsible taxing, borrowing, and spending must stop.”
Perdue countered, saying there was a need to “reduce the deep and unnecessary cuts that the Republican-controlled legislature forced on us in all 100 counties last year. The budget I submit will restore the cuts they made and prevent even deeper cuts that were scheduled for next year.”
One of the key items in the budget for school systems across the state is to end discretionary cuts. All public school superintendents in the R-C area have been forced to juggle their budgets after being forced to return tens of thousands of dollars to the state. Across North Carolina, school systems will combine to give back nearly $430 million this year alone.
Listed among the Governor’s funding priorities in her proposed budget are:
Saving/creating 11,000 educational positions statewide;
Lowering class size in grades K – 3;
Raises for teachers and principals for the first time in four years (an average of 1.8% for teachers and an average of approximately 1.54% for school administrators);
Investing in innovative new education solutions, such as the mobile technology already in place in approximately 480 schools across the state;
Restoring funding for the Governor’s Schools, NC School for the Deaf, Eastern School for the Deaf, and Governor Morehead School;
Providing a net increase of more than $53 million for the community college system;
Investing $145 million more into North Carolina’s public universities;
A $5,000 credit to encourage small businesses to hire post-911 veterans or unemployed North Carolinians now and retain them for at least a year;
Small Business Startup Tax Credit;
Research and Development Innovation Tax Credit;
Expand Biz Boost for North Carolina Manufacturers;
Institute a Film Industry Workforce Training program, which will provide funds to Cape Fear Community College and Forsyth Technical Community College to train up to 400 workers for production crews;
Invest in the Biotechnology Strategic Growth Loan Fund to support technology-based, entrepreneurial companies with an already established technical proof-of-concept;
Fund an AgBiotech Initiative to provide targeted funding for certain commercially relevant ag-biotech research projects;
Invest in an Energy Research and Green Jobs initiative to provide funds to Research Triangle Institute (RTI) to support energy research and green jobs; and invest in the North Carolina New Energy Production Initiative, which provides funds to promote energy production in North Carolina and in state and federal waters offshore, and explores new manufacturing opportunities linked to low natural gas prices;
Provide tuition assistance by classifying certain military veterans (and their dependents) as resident students for tuition purposes. (A military veteran must have been last stationed at a military installation in North Carolina and honorably discharged on or after July 1, 2011);
Fund Student 2 Student, a program of the Military Child Education Coalition that connects military-connected and civilian students in middle and high school to assist with transition and peer support;
Direct additional funds to the National Guard to provide tuition assistance to all eligible soldiers and airmen;
Re-establish the Military Morale and Welfare fund, a grants program for military installations throughout the state to provide community service and quality of life programs for military members and their families; and
Provide funding and strategy for military communities to plan and position themselves favorably in preparation for potential future Base Realignment and Closure (BRAC) actions and/or federal budget actions that affect North Carolina installations.
Perdue’s proposed budget was met favorably by several entities across the state.
The NC Child Care Coalition commended the Governor for restoring $43 million in funding to early childhood programs, of which $18.2 million will restore nearly one-half of the Smart Start budget and $25 million will restore 77 percent of the NC Pre-K budget.
“It is our hope that the General Assembly will agree that these investments in early childhood programs will make an important difference for our young children, their families, child care businesses, employers and our state’s future economic well-being,” said Annette Ethridge, Public Policy Consultant/Lobbyist for the Coalition.
“The impacts of a cuts-only approach have been clear in communities across the state: fewer teachers in the classroom, less access to health care, higher costs to accessing the courts and reduced protections for the health and well-being of our environment and communities,” noted Alexandra Forter Sirota, Director of NC Budget and Tax Center.
“The decisions made in our state budget have real consequences for all North Carolina families,” she added. “This budget acknowledges the reality of the educational needs facing our young people and the future economy, but a child will have trouble succeeding in school if they can’t access dental care, or if their parent lost their job, or if their community is not safe. The time to rebuild is now, and all lawmakers should consider revenue when approaching the second year of this budget.”
Together NC, a coalition of more than 120 partner organizations, applauded the Governor for recognizing that what North Carolina needs now is to reinvest in its people and places, not continue to retreat from them.
“We have said over and over again that the path to full economic recovery is to restore and build upon our public investments in education, healthcare and infrastructure, not slash and burn them,” said Louisa Warren, co-coordinator of Together NC. “The Governor stood strong today and showed us what it looks like to stand up for education and our state’s future.”
The state legislative short session starts next week where members of the General Assembly will discuss and vote on Perdue’s proposed budget.