Budget, Sales Tax Plan And Education Changes Tentatively Passed By NC Senate
Wednesday, the North Carolina Senate tentative approved its $21.5 billion state budget. The final vote will take place Thursday.
The budget vote was largely party line, but there was a surprise. A key Republican budget writer voted against the plan.
The debate was, as expected, contentious. "Now we can do fairy tales, sit down I’m not yielding…" Senator Tom Apodaca scolded one his Democratic counterparts during the debate. And as expected the big debate yesterday revolved around education. Senator Dan Soucek said the plan will reduce class size in early grades by hiring "over 3,200 new teachers," over the next two years. But the money for that comes from cutting some 5,200 teacher assistants. It would save the state $57 million. The bill also calls for $109 million in cuts to corporate tax rates. So Democrats offered amendment after amendment to stop those tax changes and use that money to pay for both more teachers and the current number of teacher assistants. Those amendments were voted down.
The final vote on the budget was 30 to 19, which leads us to the surprise. Republican Senator Bob Rucho of Mecklenburg County voted against the measure. He did so after talking with Mecklenburg County Manager Dina Diorio.
The Senate budget includes the measure to redistribute sales taxes in the state. Mecklenburg County estimates it could lose $62 million in revenue over five years, and that, as Rucho told us, is why he couldn’t support the measure. Charlotte stands to lose millions as well. "It’s really perverse," says Charlotte Mayor Dan Clodfelter, "They’re basically just dismantling the income streams for cities."
Supporters say rural counties need the extra revenue to build roads and lure jobs. Clodfelter agrees that rural areas are hurting but he doesn’t think this will help. "You’re going to take some money out of a couple honey-pots in Mecklenburg and in Wake county and in Durham and you’re going to sprinkle it in little bits and pieces all around the state. That money is not going to do anything to solve the real deep economic challenges of rural North Carolina."
But it would, he argues, make it hard for cities, like Charlotte to continue to fund their roads, their infrastructure without cutting budgets or finding new revenue. That is why another politician, Governor Pat McCrory, sees the redistribution plan as a hidden tax. "Cities and towns and counties would probably have to increase their property tax to make up for the lost revenue."
And McCrory has vowed to fight the measure. But it’s not his fight yet. If passed by the Senate today, the budget then goes to a conference committee, where members of the House and Senate hash out the differences in their respective plans. The sales tax redistribution will be one of those debated.