Legislators: Cut first; taxes last resort
By Matthew Whittle
Published in News on December 15, 2008 1:46 PM
Despite being faced with a 2009-10 budget shortfall that some are projecting to be more than $3.3 billion, local state legislators say they are unlikely to entertain the idea of expanding the state's revenue base to help balance the budget.
"I'm dead set against all tax increases," said Senator-elect David Rouzer, R-Johnston.
Instead, he said, the Legislature's first order of business needs to be looking for places to cut spending.
"People say this is a revenue crisis. That's baloney," he said. "It's a spending crisis, and I'm going to advise that we go through every program. That doesn't mean we take money from vital services, but it does mean we take an overall look at everything.
"We've got plenty of waste in government, and everybody knows that, especially in DOT (state Department of Transportation)."
But there are groups like the N.C. Budget and Tax Center and the N.C. Justice Center that are advocating balancing the state's budget next year -- as mandated by the state Constitution -- through a mix of budget cuts and revenue increases.
In particular, officials with the Budget and Tax Center have said that this should provide an opportunity for the state to reform its tax structure -- broadening its base by expanding the sales tax, adding new income tax brackets and adjusting the corporate tax, while possibly lowering individual rates. Such changes, they said, would help make North Carolina's revenues less responsive to changes in the economy.
Additionally, the Legislature's 21st Century Transportation Committee recently issued a report calling for a higher highway use tax, higher registration fees, new "vehicle miles traveled" fees and toll roads to help meet the state's $65 billion transportation shortfall.
And while some legislators like Senator-elect Don Davis, D-Greene, do support the idea of revamping the tax code, they are not willing to commit to doing so next year.
"A lot of the foundation has already been laid (by the work of groups like the Emerging Issues Forum), and I think we need to continue to explore that," he said. "But right now things are tough, and I think the general philosophy would be to try to really look for ways to cut programs and be a little more efficient instead of increasing any rates."
Rep. Van Braxton, D-Lenoir, and Rep.-elect Efton Sager, R-Wayne, agreed.
"It was built back in the '30s, so I think we do need to overhaul our tax system, but this may not be a good time," Braxton said. "This might be a good time to start looking at it, but I do not think this is the time to make changes. Let's get through this and once we come out on the other side, look at what we're doing and see if there is a better way."
And in the meantime, he also agreed that tax hikes are unlikely.
"I never say what I will or won't do before I'm in that situation, but I think that we need to first look at cuts, and I don't think there need to be any sacred cows," he said.
But, Sager added, that will be hard.
"We do need to look at the whole tax structure," he said. "But I am opposed to any new taxes unless it becomes absolutely necessary. That has to be a last resort. We need to look for cuts first, especially in the continuation budget. People are going to have to make some tough decisions."
But the general agreement, however, is that while every program needs to be examined, not every department will see cuts -- particularly those involving public safety.
"That wouldn't quite be fair I don't think. We need to fund, those things that are essential," Rep. Larry Bell, D-Sampson, said. "But at this time I'd say I'm against raising taxes if we can help it."