Final Push From Allies of Tax Plan

Gov. Mike Easley stepped up his effort to end the state’s budget crisis Friday, throwing himself behind a tax package that goes to the House floor next week and urging his supporters to do the same.

Opponents of a tax increase, meanwhile, launched their own campaign to defeat the proposal, sending out e-mail messages and saying that Easley and other Democrats do not have enough votes in the House.

But Easley’s efforts, combined with the more guarded optimism expressed by Senate leaders Friday – that the House proposal might do – may indicate that an end to the budget impasse is in sight.

“We’re close; we’re awfully close,” said state Sen. Marc Basnight, a Democrat from Manteo and president pro tem of the Senate, where even Democrats have vigorously opposed earlier versions of the House plan. “We’re awfully close to covering the ground that’s necessary to reach agreement.”

Republican critics said Friday, however, that House Democrats will have a difficult fight in their own chamber Monday, when the tax proposal could face its first floor vote.

At stake is a tax package that is projected to raise $ 1 billion in new revenue over two years by, among other things, adding a penny to the sales tax and increasing the individual income tax rate by a quarter of a percentage point for the wealthiest North Carolinians. The proposal, endorsed Thursday by the House Finance Committee in an 18-13 party-line vote, also has $ 153 million in tax breaks for parents, married couples and low-income taxpayers.

Supporters say the money is needed to offset declining revenue growth and to avoid deep cuts in education and human services.

House Democrats last month had proposed a larger income tax increase – and had shied away from an increase in the sales tax, which some representatives view as an unfair burden on the poor. But Easley and senators opposed the House proposal to increase the state income tax. The newer proposal is more palatable on that score, senators say.

“I think it’s clear that there’s been movement …” said Cari Hepp, spokeswoman for Easley. “We’ve had the House Finance Committee pass a package that’s workable.”

Easley was not planning the type of media campaign this weekend that he launched two weeks ago, when he made a TV appearance and aired radio and TV announcements promoting his own tax package to balance the state’s cash-strapped budget.

But the governor issued an opinion piece Friday, for publication in newspapers over the weekend, urging passage of the most recent House plan. He also sent more than 1,000 e-mail messages and faxes to supporters, Hepp said, asking them to speak out to end the impasse.

“Your legislators face a critical choice next week on the state budget,” Easley wrote in the op-ed piece. “They can either vote to chop our commitment to public education, or your legislators can choose progress. The choice is that simple.”

Easley’s opponents, many of them Republicans, have stepped up their efforts, as well. Citizens for a Sound Economy, a conservative anti-tax group, sent out its own e-mail messages urging voters to pressure legislators to oppose new taxes. The e-mail messages even provided a list of House members, Republican and Democratic, who may be on the fence on the issue.

House Republicans also contended Friday that House Speaker Jim Black does not have the votes to get the tax package through in a chamber where Democrats hold a tenuous majority of 62-58.

“That’s what I have heard, that he does not have his side together,” said Frank Mitchell, an Iredell County Republican and the House minority whip. “We have talked in our caucus amongst the Republicans, and there is no one who has said they will support this proposal.”

Mitchell predicted that the vote Monday will be very close and could turn on how many lawmakers choose to “take a walk” during the vote to avoid a recorded position.

“I think it will either pass or fail either by just a couple of votes, depending on how many are there Monday night,” Mitchell said. “I look at it definitely being that close.”