As reported at Under the Dome:
Highlights of Perdue's wishlist, provided to Dome, include: an "emergency" 1-cent increase in the sales tax that would expire in October 2010, an emergency income tax surcharge on single taxpayers who earn more than $500,000 and married couples filing jointly making more than $1 million.
Perdue wants a 50-cent-per-pack increase in cigarette taxes, down from the $1-per-pack she requested in March, plus 2-cents-per-can more on beer and a 2 percent increase on alcohol.
Unbelievable. Just a couple weeks after the N.C. House approved a budget with $784 million in new taxes, the Gov. is calling for tax hikes nearly twice that. And please don't insult our intelligence by calling them "emergency" taxes that will allegedly expire in 2010. We've seen that movie before.
The Governor's tax-hike fever is the result of a lack of any true desire to trim our bloated state budget. For instance, in FY 2008-09 (the fiscal year that just ended June 30) the state is estimated to have spent $20.3 billion. Revenue for current fiscal year is estimated at $17.5 billion, plus $1.4 B federal stimulus funds; then add in $1.6 billion in new tax revenue for a total of $20.5 billion. End result is a net year-over-year increase in actual state spending. And that isn't even factoring in possible fee increases (there was $81.2M worth in the House budget), or raiding of various "special" funds ($216M in House budget).
For some perspective, a $20.5 B budget for FY 2009-10 would still mark a 29% increase in just 5 years.
A full cent sales tax increase would put North Carolina's total rate at a staggering 7.75% (remember, part of that sales tax is from the 2002 "temporary" taxes that were made permanent). Compare to neighboring Virginia at 5% and South Carolina at 6.8%. Tennessee's is roughly 7.2% - and they don't even tax income!
Such a massive tax hike will kill jobs and hamper North Carolina's economic recovery and undoubtedly hit the poor the hardest. But who cares about that when you have a lot of special interest groups to take care of?
UPDATE: The proposal is available here.