Let's talk about Bev

I confess to having had on-again-off-again enthusiasm for Governor Perdue over the past year or so, but lately I'm mostly "on." I think she's done a good job in general handling the catastrophic financial mess she inherited from George W. Bush. And I especially appreciated her recent push-back against the regressive budget proposals from the House and Senate. The showdown has naturally captured the attention of North Carolina's editorial pages, many of which share the sentiments of BlueRidgeNow.

The General Assembly won't reach a budget deal this week. That's the bad news. It's also the good news. Gov. Bev Perdue, who had pitched a king-size tax package of her own as the clock wound down on the 2008-09 budget year, was startled to learn three days ago that her fellow Democrats in the Legislature had come up with one even worse.

The Democratic leaders cobbled together a $982 million tax package that included a 1-cent sales tax, 10 cent a pack cigarette tax, new beer and wine taxes -- plus an extra 2 percent personal income tax.

"I saw a proposal that stunned me, quite frankly," Perdue told reporters Thursday night. "Who in the world thinks in these trying, challenging times for families that you can raise income tax on working families and middle class families?"

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Guice, a freshman Republican, lamented the lack of public hearings, the budget writers' refusal to consider a variety of program cuts and the closed club that makes the decisions. "Democrats and Republicans alike have been left out of these budget discussions," Guice said in his remarks on the House floor.

We predicted in this space at the time that Guice's critique would not faze the Democratic leaders. How right we were. As the latest Democratic tax package shows, it's gotten worse. Not only did the backroom budget crafters not consult with the rank and file, they didn't bother to bring the governor into the loop.

I don't know if they kept the Governor in the loop or not, for all I know this could be pure grand-standing. But somehow I think not. Somehow I think the good old boys who craft North Carolina's budget and tax policy have gotten so used to doing whatever the heck they want, that they forgot there's a new Governor sitting a few blocks away.

I just wish Perdue would also threaten to veto any budget that continues to subsidize out-of-state athletes to the tune of $10 million each year.

Comments

BEV needs to be bold.

The mess we are in this year will not end with this budget. It could be another decade before things are somewhat back to normal. This is the best time to take the hard positions, make the toughest choices and take a deep breath for the long haul. Legislators may not be willing to put their necks on the line and do these things but Perdue should veto any budget that isn't groomed to within an inch of its life.

Progressives are the true conservatives.

Bush's Fault?

I think she's done a good job in general handling the catastrophic financial mess she inherited from George W. Bush.

Umm...wasn't Mike Easley the previous Gov?

Get real

It's the policies of the Bush administration that blew up Wall Street and landed all of the states in a huge fucking mess.

Progressives are the true conservatives.

Thank you

Couldn't have said it better myself. Every state is sucking wind these days ... and they're all on the ropes for the same reasons: Bush's War On Terra which led to the biggest deficit in the history of everything.

Easley was and is irrelevant to this discussion.

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We are not amused.

Okay. Let's not talk about Bev.

Heh.

Ya'll have fun over the next couple of weeks. Things seem miiiiiiighty slow and I'm going to see some redwoods soon.

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We are not amused.

and most other discussions

Look in the dictionary under irrelevant and it says see Mike Easley. His 8 years will go down as the worst in my lifetime.
Sure GWB lead the country down the garden path, that is beyond dispute, but Easley did nothing in his 8 years to prepare the state for lean times.
In a state that has elected 2 Scotts, Dan Moore, Terry Sanford, Jim Hunt and not one but two honorable GOP governors, the Easley era is a blight on our house.

"budget that continues to subsidize out-of-state athletes"

Can someone explain this? I'm an off-and-on lurker here, and I'm missing the reference here.

I just wish Perdue would also threaten to veto any budget that continues to subsidize out-of-state athletes to the tune of $10 million each year.

budget that continues to subsidize out-of-state athletes

If an athlete is on a full athletic ride, the in-state or out-of-state status doesn't matter as the school is playing for it anyway. Am I right or wrong on this?

Boosters responsible for revenue cut

The scholarships are paid by boosters, not the university. The boosters lobbied the legislature to have in-state rates applied to out-of-state athletes so that the boosters wouldn't have to pay so much money. The UNC Chapel Hill boosters and alumni associated with their PAC called Citizens for Higher Education in particular were responsible for direct and bundled contributions to legislators. They got a good return on their investment but the money comes out of tuition revenue.

BTC says Perdue's math is "way off"

Now I'm fully confused

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We are not amused.

A little math lesson

While the Guv was almost certainly correct in shooting down the tax package, she's just plain wrong in claiming that the income tax portion was the big problem. As Elaine Mejia of the Budget and Tax Center pointed out over the weekend:

The fact is that the sales and excise tax increases in the plan would have a far greater impact on working families than the proposed income tax surcharge. In fact the proposal to increase the sales tax by 1% would have cost the middle 20% of income earners ($37,000 annual income) nearly six times more than the proposed income tax surcharge. The sales tax would cost them an estimated $130 in FY 1009-10 compared to a $23 increase in income taxes because of the surcharge.

Since her press conference announcing her budget proposal earlier this year the Governor has continued to imply that somehow taxes on consumption have less impact on taxpayers, insinuating that they are somehow voluntary. Tell that to the “working family” whose washing machine breaks down. The sales tax on that one purchase alone (roughly $39 on a $500 purchase) would eclipse the additional burden from the 2% income tax surcharge (roughly $23) on middle-income families.

Now that the train is stopped

is there any chance it'll start again on a better track? I'm always nervous when things start moving fast in Raleigh. That's a sure sign no one knows what's really going on.

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We are not amused.

I understand your point, Rob,

and I agree that BTC's proposal has a lot more thought behind it and would have a much more benign impact on lower income families.

But even though the sales tax is regressive, it's better than having smaller (or no) additional revenue in the budget, which I fear might happen if this stalemate continues much longer. The loss of even more services, especially within the HHS realm, would be devastating, both health-wise and economically, for many of those in the lower income brackets.

If that sales tax gets pulled out of the revenue package, or even trimmed down to 1/2 cent, I am not confident the GA would replace those dollars with other taxes.

Not about math -- all about politics

While you're right about the fiscal impact of a tax surcharge, that's not the point.

The GOP was already shouting "a tax on a tax!"

Perdue just saved the legislative Democrats, or at least gave them another chance once they saw the GOP and public reaction. And perhaps she started her own political recovery.

At a minimum, she flexed her gubernatorial muscle and will receive more consideration from legislative leaders for the duration of her term.

These articles about her perceived weakness are just foolish. Who cares about bad polling in your first six months in office? She's not up for election until 2012. Even if a GOP legislature is elected in 2010, they now know they have to deal with her veto.

How are these "Raleigh insiders" so politically obtuse?

 

Could be a while...

We'll know more later today as legislators filter back into Raleigh. Let's all remember, though, that while it's an understandable source of frustration to everyone involved that they can't seem to get things done, last week's proposed tax package was badly flawed and very regressive.

Let's hope lawmakers take the opportunity presented by the latest breakdown to revisit the terms of the Budget and Tax Center proposal from the spring that would have CUT taxes on the bottom 60% of households AND raised the necessary bucks.