Republicans Offer Budget Solution
06/28/2007 | 09:42 AM
Increases Education Funding - Cuts Taxes
A two-year fiscal plan, introduced Tuesday by Senate Republican Leader Phil Berger (R-Rockingham) and House Republican Leader Paul Stam (R-Wake), proposed increases in education spending for dropout prevention, vocational education and community colleges. With a projected state surplus of over $1.5 billion, the bulk of which consists of excess tax collections, the Republican plan also provides broad tax relief and spends less money than the previously passed House or Senate Democrat budgets. Democrats are stalemated in their effort to adopt a budget before the June 30 end of North Carolina's fiscal year. The Republican proposal establishes a framework for a bipartisan partnership to fashion a workable budget to adequately fund state programs and cut tax rates.
Highlights from the Republican plan:
Senator Berger made the following statement:
"As this plan demonstrates, we can meet North Carolina's needs, spend less, and allow our citizens to keep more of their hard-earned money. This plan will put North Carolina on sound fiscal and economic footing for years to come. Reductions in sales and income taxes alone will make our state more competitive with neighboring states and keep more than $1 billion in the pockets of North Carolina's families.
"With North Carolina's high school dropout rate over 35 percent, it is imperative that we find new ways to keep our students in school so they can graduate prepared to compete in the global economy; we can do that by prioritizing new education spending. To achieve that goal, Republicans propose targeting additional money to public schools and community colleges to fund alternatives to the current one-size-fits-all approach to education. We must employ new solutions, including additional vocational opportunities in high school and expanded career offerings in community colleges.
"To create a favorable environment for new jobs and a strong economy, Republicans have proposed $2 billion in infrastructure bonds primarily for roads; we also support added capital spending for our universities and for upgrades to water and sewer systems. In addition to building needed infrastructure, Republicans advocate lower taxes for small businesses so North Carolina companies can compete and create new opportunities, thereby making our state more attractive to new and expanding businesses. This plan does that by reducing individual and corporate income tax rates.
"Given the current budget surplus, estimated at about $1.5 billion, the people of North Carolina deserve to have some of their hard-earned money returned. Sadly, Senate and House Democrats are locked in a battle with each other to find new ways to spend money and raise taxes instead of passing a reasonable budget. If Democrats adopt our approach, they can fund government at or above levels they have already supported and will, additionally, put over $1 billion back into the pockets of North Carolina's families. We welcome the opportunity to partner with the Democrat majority to adopt a bipartisan plan for North Carolina's future."
Representative Stam added, "Later today House Democrats will pass a continuing resolution to increase sales tax rates by $300 million per year. This is completely unnecessary, as today's proposal demonstrates."
Joel Raupe
Administrative Assistant
joelr@ncleg.net
Rep. Paul Stam
Republican Leader
North Carolina House of Representatives
pauls@ncleg.net
A two-year fiscal plan, introduced Tuesday by Senate Republican Leader Phil Berger (R-Rockingham) and House Republican Leader Paul Stam (R-Wake), proposed increases in education spending for dropout prevention, vocational education and community colleges. With a projected state surplus of over $1.5 billion, the bulk of which consists of excess tax collections, the Republican plan also provides broad tax relief and spends less money than the previously passed House or Senate Democrat budgets. Democrats are stalemated in their effort to adopt a budget before the June 30 end of North Carolina's fiscal year. The Republican proposal establishes a framework for a bipartisan partnership to fashion a workable budget to adequately fund state programs and cut tax rates.
Highlights from the Republican plan:
- Keeps promise to sunset the "temporary"
increases of sales and personal income taxes (total
tax reduction of $300 million per year)
- Spends less overall than Senate or House
Democrat budgets and less than Governor Mike
Easley's proposed budget
- Funds all major line items in the state budget
at levels that meet or exceed amounts approved by
Democrats
- Cuts personal income taxes in all brackets by
.25 percent this year ($358 million dollars in
annual savings for North Carolina's families)
- Reduces North Carolina's highest in the
southeast corporate income tax rate by .40 percent
in 2009 ($72 million dollars in annual savings to
allow North Carolina businesses to grow)
- Provides reserve appropriation of $20 million
for mental health
- Repays the $90 million Governor Easley took
from the State Retirement Fund
- Funds $25 million in second year for an
innovative pilot vocational program in public
schools
- Funds Communities in Schools (a proven dropout
prevention program) at higher level than either
House or Senate Democrats
- Phases out transfer of road taxes from Highway
Trust Fund
- Medicaid swap along lines of recently announced
Republican plan (similar to original plan advanced
by Senator Dan Clodfelter); takes pressure off
local property tax rates
- Funds payment of recently announced Republican
roads and infrastructure bond package ($2 billion
subject to vote of the people)
- Fully funds rainy day fund and repair and
renovation fund
- Public school teacher pay raise of 5 percent
- State employee raise of 4 percent
- Incorporates Senate Budget provisions to combat
Medicaid fraud, provide non-profit accountability,
cap North Carolina's highest in the southeast
gasoline tax, and provide needed additional funds
for courts (assistant D.A. positions, support
positions)
- "Surplus" in both years and projected into
future years
- Increases funding for community colleges and
allied health training programs
- Significantly limits non-voted debt (COPs
financing) from both Senate and House budgets
Senator Berger made the following statement:
"As this plan demonstrates, we can meet North Carolina's needs, spend less, and allow our citizens to keep more of their hard-earned money. This plan will put North Carolina on sound fiscal and economic footing for years to come. Reductions in sales and income taxes alone will make our state more competitive with neighboring states and keep more than $1 billion in the pockets of North Carolina's families.
"With North Carolina's high school dropout rate over 35 percent, it is imperative that we find new ways to keep our students in school so they can graduate prepared to compete in the global economy; we can do that by prioritizing new education spending. To achieve that goal, Republicans propose targeting additional money to public schools and community colleges to fund alternatives to the current one-size-fits-all approach to education. We must employ new solutions, including additional vocational opportunities in high school and expanded career offerings in community colleges.
"To create a favorable environment for new jobs and a strong economy, Republicans have proposed $2 billion in infrastructure bonds primarily for roads; we also support added capital spending for our universities and for upgrades to water and sewer systems. In addition to building needed infrastructure, Republicans advocate lower taxes for small businesses so North Carolina companies can compete and create new opportunities, thereby making our state more attractive to new and expanding businesses. This plan does that by reducing individual and corporate income tax rates.
"Given the current budget surplus, estimated at about $1.5 billion, the people of North Carolina deserve to have some of their hard-earned money returned. Sadly, Senate and House Democrats are locked in a battle with each other to find new ways to spend money and raise taxes instead of passing a reasonable budget. If Democrats adopt our approach, they can fund government at or above levels they have already supported and will, additionally, put over $1 billion back into the pockets of North Carolina's families. We welcome the opportunity to partner with the Democrat majority to adopt a bipartisan plan for North Carolina's future."
Representative Stam added, "Later today House Democrats will pass a continuing resolution to increase sales tax rates by $300 million per year. This is completely unnecessary, as today's proposal demonstrates."
Joel Raupe
Administrative Assistant
joelr@ncleg.net
Rep. Paul Stam
Republican Leader
North Carolina House of Representatives
pauls@ncleg.net