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Thanks to the Governor, the Budget Gets Even More Regressive

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Thanks to the Governor, the Budget Gets Even More RegressiveMost of the suspense about this week's probable House and Senate votes on a final budget bill has focused on the likelihood that the lottery will be included in the budget.Lost in the lottery fever have been two important aspects of what appears to be the final budget deal: Gov. Easley's demand that transfers and savings in the House budget be replaced by keeping reimbursements to local governments and giving them the impossible-to-resist option of raising the local sales tax; and the dramatically regressive nature of Easley's demands.

The House passed a budget that took $80 million of tobacco settlement money headed to the Golden Leaf Foundation and $100 million from so far unspent Hurricane Floyd relief funds to pay for state programs. The House also saved $70 million from funding state payroll at 98 percent and counted on saving $31 million from an early retirement program.

Easley apparently convinced House and Senate budget leaders to reject all those revenue sources and to rely instead on the sales tax, proceeds from the lottery and other budget shifting.

The net effect of Easley's influence is a far more regressive final budget than the original House plan. The North Carolina Budget and Tax Center found that under the new plan the poorest fifth of North Carolina taxpayers would pay 17 times more as a share of their income than the richest one percent of taxpayers.

--from the Common Sense Foundation, (www.common-sense.org)

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