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...
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.