Same song, different hymnal
I was planning on writing something for the Tuesday's print edition on this, but power problems at the home office have prompted us to rely on our friends at AP for coverage from Monday's General Assembly sessions.
Actually, the sessions themselves were pretty tame. But afterward, we scrubby reporter types were trolling around for news of the budget from the honchos in each chamber: House Speaker Jim Black and Senate President Pro Tempore Marc Basnight.
If you listen to Black, the legislature could very well have a budget done by July 20, which is currently the government's self-imposed deadline. Basnight doesn't sound nearly so optimistic. Should it worry me that the two guys who are supposed to be in charge don't really sound like they're dealing with the same set of facts?
Black on the timing:
"It could be done and I hold out hope that it will be done."
Basinght on the timing:
"No. You can't get a budget done in eight or nine days."
Oooooooo-k. But at least you guys agree on where you are in the process right? The big sticking point so far has been the finance side of the equation: how much to anticipate raising from taxes and which taxes to raise or lower.
Speaker Black said that an agreement on the finance side could be imminent. He said that the Senate had agreed not to cut the top personal income tax rate or the corporate income tax rate and that the sales tax would stay put at 7 percent across the state (except Mecklenburg County, where it's 7.5 percent). That leaves the tobacco tax as the only sticking point on the finance package, he said.
"We're pretty close on the finance package," he said. Mainly it’s the tobacco tax and that's not far apart." And Black said he expected the tobacco tax increase to stay at 25-cents.
Hey, Sen. Basnight, does that sound right? No? Not so much?
When told that an agreement on a finance package was imminent, Basnight replied: "It is?"
Basnight said that the Senate would go along with not lowering the top personal income tax or corporate income tax (two things the Senate wanted) if, IF, the House would agree to raise the tobacco tax 35 cents.
"Our last proposal to them was we would go to their position on income and sales (taxes) if they would come to ours on tobacco."
So, dear readers - all 12 of you, a logical question might be: are the honorables close to a budget deal and what exactly might that deal entail?
I can answer, unequivocally, without hesitation, and with 100 percent certainty: I dunno.
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Update: Because 99 percent of it won't show up in the morning paper, I'm going to paste what our friends at AP wrote regarding the budget. AP writer Gary Robertson, who penned the following piece, heard more harmony than I did between the two leader, but he points to many of the same points of contention:
RALEIGH, N.C. (AP) - Running out of time to meet a budget deadline, legislative leaders said Monday they were largely in accord on taxes for the next two years but still differed over a cigarette tax.
Senate leader Marc Basnight, D-Dare, acknowledged that the Senate had largely given up on attempting to lower the corporate income tax rate in 2007 and phase out the top individual income tax bracket on the highest wage earners.
The House and Gov. Mike Easley didn't want to do either, Basnight said. Easley met with legislative leaders last week.
"The Senate concurred to that position in order to allow this process to continue," he said Monday night. "Our opinion was that we lower both of them."
House Speaker Jim Black, D-Mecklenburg, and Senate leaders said the two sides still didn't see eye-to-eye on how high the cigarette tax should increase.
The House budget raises the cigarette tax from 5 cents a pack to 30 cents. The Senate spending package proposes raising it to 40 cents. Easley's budget proposal would raise it to 40 cents this year and by another 10 cents next year.
"We're pretty close on finance issues," Black said. "About the only thing left is the cigarette tax."
The difference between a 25-cent tobacco tax increase and a 35-cent increase is roughly $60 million in revenue for the current fiscal year.
A handful of conservative House Democrats won't agree on anything higher than a 25-cent increase. That's a problem because Democrats have a 63-57 advantage in the chamber and Republican are united behind opposing a tax increase.
More negotiations on tax and budget issues were expected Tuesday.
One compromise floated by the Senate would raise the cigarette tax 35 cents in exchange for retaining the higher corporate and individual income tax rates.
Getting the taxes resolved will go a long way toward reaching a compromise on a final two-year spending plan for state government. The House and Senate budget proposals were about $154 million apart on roughly $17 billion in spending for the coming year.
The two sides already have missed a budget deadline of July 1, keeping government running at last year's levels with a stopgap spending measure that expires July 20.
Basnight was pessimistic that a budget could be finalized and presented to Easley before then. Missing the deadline would require an extension to the "continuing resolution."
Black, however, said: "We're not slamming the door in each other's faces. I hold out hope it will get done."
The House and Senate also likely must resolve pending lottery legislation before they adjourn for the rest of the year. Easley prefers changes to the House lottery bill approved in April to loosen an advertising ban and put aside more money for his education initiatives.