Anti-Tax Hike Protesters Go To Raleigh

RALEIGH – Protesters gathered at the Legislative Building on Tuesday to oppose plans to raise sales and income taxes to close a budget hole.

Inside during a House session, Speaker of the House Jim Black, a Mecklenburg County Democrat, announced that people from across the state had come to the General Assembly and that some were in the gallery.

This prompted a “No new taxes!” chant and a few tea bags tossed onto the House floor, symbolic of the 18th century Boston Tea Party. Colonial protesters boarded a ship and dumped its imported and taxed tea cargo into Boston Harbor to defy taxation by the crown. More than two centuries later on Tuesday, the most vocal in the Raleigh gallery was evicted by the House sergeant at arms.

But largely the protest was not the raucous affair some had expected or feared. A similar rally against a proposed income-tax increase in Tennessee last month ended in some broken windows, but also in lawmakers’ not voting on their plan.

“I didn’t like them throwing things onto the floor. … it’s moving more toward unlawful,” Black said. “But I can appreciate people watching what’s going on. These people got in their cars and drove to Raleigh. I respect that.”

Lawmakers are a month late in coming up with a state budget because they now expect to have less money over the next two years than originally thought. Ideas on how to raise and spend state money have to be rethought.

The latest idea, giving local governments the option to add a 1/2 cent sales tax and increasing the income tax for those who make more than $ 200,000, brought out the crowd, which topped out at about 500 in the late afternoon. The anti-tax rally was spurred on by several AM talk radio stations.

Bob Smith of Durham County heard about the event on the radio. As he listened to an activist from the group Citizens for a Sound Economy, the self-employed engineer pointed to the monolithic state Department of Public Instruction building known as “The Pink Palace” behind the Legislative Building.

“This building is a monument to the problem,” he said. “We have more … products that teach reading and math, and the scores are still dropping.”

Smith said school vouchers, a mainstay of the GOP platform, would give inner-city families and others with poor and underachieving schools a better chance at a quality education and would also cut down on government spending.

“I think we need to get a message to lawmakers. I know [at this protest] it’s no new taxes, but we also need to cut back as well,” he said.

The message of the event was clear as the crowd chanted and waved signs declaring “Back room tax hikes are not the answer” and “No new taxes, Do your job.” Another said, “God, please save us from the Democrats.”

Protests this session have demonstrated the stark ideological line that separates those who support raising taxes to fund programs, especially social service programs, and those who believe spending and taxes must be cut to maintain a healthy economy and secure future.

This classic political struggle has been heightened across the country this year as the economy has turned south and tax collections on corporate profit and personal income have dried up.

“It is happening in many states. Tennessee has just gone through all sorts of chaos,” said Thad Beyle, a UNC political science professor who specializes in state politics. “I do think that the focus the governor had on the lottery early on was not helpful. Of course, it would take a while to get one under way.”

Durham Sen. Wib Gulley walked past the protest on his way into the Legislative Building. He said he understands taxpayer frustration but said North Carolina is in the “bottom half” of states in terms of taxes. The General Assembly over the 1990s cut taxes more than any other state, save for Arizona, he said.

“They need to know what they are not being told,” he said. “We are one of the two leading states in terms of cutting taxes. The only people who ought to be out there are those who make more than $ 200,000 a year. But that wouldn’t make for too big of a gathering.”

At a City Council meeting Monday, Councilman Thomas Stith made a motion that the council speak out against the local sales-tax option local governments would get in exchange for the state keeping about $ 2 million that would normally come to the county from certain annual tax reimbursements. The motion failed 6-5 with Mayor Nick Tennyson saying later that even if the Council voted against the local option, state tax reimbursements might still be taken away.

“It’s either this or we get zip,” he said.

On Tuesday, Black said he hopes a combination of cuts and taxes would be approved to balance the budget. He also stressed the state’s AAA bond rating. Even though a lowered bond rating to AA might only result in an extra $ 15 million in expenses from selling bonds, the state’s reputation is at stake, he said.

“Some House members don’t think that’s a big deal,” Black said. “But we lost it in 1930, and we didn’t get it back until 1960. … It says something about our state.”

The Senate and then the House had passed their respective budgets by June and were set to negotiate a final budget when a credit rating agency placed the state on probation. State fiscal analysts then lowered revenue projections by $ 167 million to show the state was more conservative in how much money it thought might be raised through taxes in the future.

The new revenue formula all but scuttled the budget proposals. Lawmakers have been scrambling since the July 13 credit-probation notice to come up with some new combination of taxes and cuts to meet the budget goals, which include some new education spending.

Senate President Pro Tem Marc Basnight, a Dare County Democrat, does not like the income tax idea, but if a budget is to be passed, it must get through the more contentious House, where Democrats have only a 62-58 majority. Basnight has stressed using sales tax over income tax, but “some of my people are adamant that they don’t want it on sales tax alone,” Black said.

A straight sales tax, like the current 6 percent levy on most goods, is regressive, meaning that it eats up a larger portion of a poorer person’s income. Sales taxes are unpopular with many lawmakers.