Easley Against Alcohol Tax Rise
Gov. Mike Easley ruled out new state taxes in the coming year only after he considered raising taxes on alcohol, according to new budget documents released Friday by the Governor’s Office.
Easley looked at raising $ 65.6 million with an alcohol beverage tax, according to one budget worksheet. But the option is crossed out, and an emphatic “NO!” is scrawled next to it — in the governor’s own writing, an Easley aide said.
“The governor’s budget is not going to include any new state tax increases,” spokeswoman Cari Boyce said Friday.
Still, Easley is thinking about accelerating an initiative that would allow local governments to raise the sales tax by a half-penny in exchange for eliminating $ 330 million in payments the state was due to make to cities and counties. The initiative was supposed to go into effect a year from now, and shoppers hardly would have noticed, because the state share of the sales tax was scheduled to go down by a commensurate half-penny.
Easley wants to suspend the reimbursements for local governments and give them the sales-tax option now, yet leave the state sales tax alone. So consumers in most North Carolina localities could pay a 7 percent sales tax for one year starting July 1 and 7.5 percent in Mecklenburg County. That would bring in an extra $ 400 million.
Opponents say that is a tax increase.
“This is the wrong thing to do when the economy is in a downturn,” said Jonathan Hill, who leads the state chapter of the anti-tax group Citizens for a Sound Economy. “We’ve lost 40,000 manufacturing jobs. We’ve got Burlington Industries declaring bankruptcy. Every time you add taxes on, you lose jobs, because somebody’s going to be hurt by that tax.”
Easley’s office distinguishes between giving local governments the option of raising taxes and raising state levies directly. That’s one reason all state taxes are off the table, Easley said this week. Still, lawmakers are likely to consider raising the alcohol tax, an idea first suggested last year by state Senate leader Marc Basnight, a Manteo Democrat.
Last year’s package of increases included a 3-cent increase in the state excise tax on beer, a 15-cent increase on a liter of wine and a 12-cent-per-dollar increase on liquor. It is unclear what alcohol tax hikes Easley was considering.
Another revenue-generating proposal in the documents Easley released Friday would make the cost of getting caught not wearing a seat belt more expensive. The governor is proposing to tack on a new court-costs fee to the $ 25 seat-belt fine and raising a variety of other court fees. Court-costs fees ranging from $ 50 to $ 90 have been discussed.
The documents also revealed that Easley hopes to use the proceeds of a lottery to finance a variety of education initiatives, including recurring expenditures such as university enrollment growth. Easley has promised that his “education lottery,” which would have to be approved by the General Assembly, would finance only his new initiatives — smaller class size in the early years and an academic pre-kindergarten.
But the documents released Friday show that, in the lottery’s first year, his initiatives would cost no more than $ 70 million
— only a portion of the $ 250 million he hopes to collect. The fact that the rest would pay for other education expenses is contrary to Easley’s pledge that all lottery revenue would be “non-supplantable.”
As if to answer that, a hand-written notation from Easley in the documents says, “Keep in mind legislation will restrict lottery to pre-K and class size after year 1.”
