Budget Deal Reached

Among the details: Transfer tax included, top income tax rate cut included, sales tax hike made permanent and could go higher.

With the GOP in charge in the Senate, I guess this is the best we can expect...

http://www.wral.com/news/state/story/1635409/

House and Senate negotiators reached tentative agreements late Wednesday on a two-year budget that would make a "temporary" sales tax increase permanent and let counties raise additional taxes for school construction and infrastructure.

The deal, which requires final approval as part of the compromise spending plan presented to the full House and Senate, also would transfer the counties' share of Medicaid expenses to the state in a three-year phase out, House and Senate Democratic leaders said.

The two sides also agreed to give counties, with local voter approval, the right to raise either sales taxes by a quarter of a cent or the land transfer tax from 0.2 percent of the sales price to 0.6 percent.

Under the tentative agreement, a quarter penny of the sales tax originally set to expire in 2003 would become permanent, said House Majority Leader Hugh Holliman, D-Davidson. In a concession to Senate Democrats, the top income tax bracket of 8 percent for the highest wage-earners would expire as scheduled at the end of the year, making the top rate 7.75 percent, Holliman and Rand said.

Both taxes were first approved in 2001 to help pay for a budget shortfall. Portions of both taxes were eliminated last year.

If approved, the deal would mean the sales tax most consumers pay would remain at 6.75 percent. But counties could agree to raise the overall sales tax to 7 percent if an increase is approved in a referendum.

The budget agreement also would create a state version of the federal earned income tax credit, giving cash rebates to some tax filers even if they paid no taxes.

Under the Medicaid plan, the state would take over the counties' share of Medicaid expenses - expected to be $520 million this year - in exchange for taking some tax revenues that local governments have kept over the years.

The Medicaid phase out will help rural counties with a high percentage of residents participating in the government health insurance program. The transfer tax option was pushed by a local government and business coalition as one way to help urban counties dealing with large population growth that wouldn't benefit much from a Medicaid swap.

Comments

Thanks

for fixing the link Greg - I'm not sure what I'm doing wrong.

Missing link

After you click the "globe" you have to paste the URL where you see the "http://"

For example you change it to
"http://bluenc.com"

If you highlight the URL before making the live link it looks like this:

http://bluenc.com

If you highlight some text that describes your link it looks like this:

BlueNC.com

It just takes practice so post more often.

Thanks again, this is great news.

 
Stop the NC Association of Realtors
Polluting our State Legislature with money.

Laura Leslie

Laura Leslie of WUNC was working even later on this story and has even more detail in her blog, Isaac Hunter's Tavern, even as she works on her morning radio.

Wed. Late Edition: "Done Deal"?

Thanks Laura for being on top of this and sharing it in real time. (Sorry I didn't stay up a little longer to catch your post as well). I just picked up the News & Observer from my driveway and the story didn't make into print.

Thanks also to Gary Robertson of the AP for being one of those who gets to show up early and go home late.

 
Stop the NC Association of Realtors
Polluting our State Legislature with money.

Laura Leslie really is one of our best reporters

often unsung. Great reporting. She sure was up late.

The finished conference report has to make it past two votes in the House and Senate, and then to the Governor's desk. Theoretically, that shouldn't be a problem - both chambers check back with their caucuses regularly before saying yes or no to major proposals.

This year, though, there's the looming specter of a handful of Senate Democrats who could spook over the transfer tax. And between the lottery changes and new taxes, it's doubtful Basnight can count on much help from even the friendliest Rs.

Maybe we need to help Sen. Basnight by sending supportive emails to Dem. Senators on the budget agreement?


Be the change you wish to see in the world. --Gandhi

It can't hurt

You know realtors' and homebuilders' lobbyists and the puppets will be flying in circles taking shots at them.

By the way, the McClatchy family is still waking up and hasn't read this story yet. Big blog hug to Gary, Laura and Mark.

 
Stop the NC Association of Realtors
Polluting our State Legislature with money.

Could be worse

And could be a lot better. The income tax cut for the wealthy is the thing that pisses me off the most. Holding the line on that should have been a no brainer.

Photobucket - Video and Image Hosting

Sometimes...

It looks like Democrats are in the minority.

This budget is milquetoast. I'm glad for the counties to get Medicaid off their backs, though it's not going to help mental health providers one little bit when they can't petition their local governments for extra funds because the state chose to screw us again. It's good to see the transfer tax option go through.

And Gosh Golly, those rich people need that tax cut, so they can donate it to the poor and downtrodden!

Scrutiny Hooligans - http://www.scrutinyhooligans.us

Some Senate Democrats

really need Primary Opponents in 2008. I think they are getting a little too comfortable in their unopposed seats and are forgetting which party sent them to Raleigh.

On the bright side, at least the 60,000 rich folks getting a tax cut wil have it offset to some degree by the transfer tax. You know how they love their huge houses at the beach and the lake..

Look for a cap.

on the transfer tax, like it will only apply to the first $250,000 of a house.
: )

One of the pitfalls of childhood is that one doesn't have to understand something to feel it. - Carlos Ruiz Zafon

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.
-me

blood boiling.....

"Keep the Faith"

"Keep the Faith"

Should be the opposite, if anything

like it not applying to the first $100,000. I would think the Realtors Association would like that since they claim their only priority in life is to ensure affordable housing.

Why?

Why a cap? That's nuts. Will they cap commercial / industrial property, too?