Protesters’ Squall Hits Budget Stall
The two sides of North Carolina’s tax debate weighed in loudly Tuesday, when a spirited group of 600 anti-tax demonstrators waved posters and chanted slogans behind the Legislative Building, and Gov. Mike Easley pledged not to sign a budget that jeopardizes the state’s financial health.
The anti-tax rally came as progress on the state budget remained stalled over a Democratic tax package that would provide $ 440 million in new tax revenue. One protester threw tea bags into the House chamber from the gallery above, paying tribute to the Boston Tea Party and prompting General Assembly security officers to remove her from the building.
“There is no need for North Carolina to start leading the nation in taxes,” said Bill Cobey, chairman of the North Carolina Republican Party, addressing the afternoon protest from under a tent on Halifax Mall. “This is one area where we don’t want to be above the national average.”
Earlier, Easley continued his effort to build a case for tax increases in a meeting with top state and legislative officials.
Easley said new revenue is needed to protect state programs and services and to avoid a downgrade of the state’s sterling bond rating. “I will not sign a budget that puts our bond rating in jeopardy,” Easley said.
Harlan Boyles, the retired state treasurer, said the series of tax cuts passed by the legislature in the 1990s reduced the state’s revenue by $ 1.5 billion and helped explain the state’s weakened financial position. He said another factor was the $ 2 billion in tax loopholes and tax preferences on the books.
“The tax increase package is very modest percent of what has been reduced in terms of reductions and preferences,” Boyles said. “It’s not unreasonable to say to the people we’re going to have to have some of it back.”
Tuesday also marked the day when pink slips went out to 278 state employees whose jobs are being eliminated as part of budget cuts recommended by legislators.
Easley announced the layoffs Monday evening amid criticism that he was trying to steal thunder from the anti-tax groups. The Governor’s Office would not release the list Tuesday of the 278 filled and 609 unfilled positions to be eliminated.
If approved, the tax package would increase the state income-tax rate for the wealthiest North Carolinians, levy a 6 percent sales tax on liquor purchases, tax health maintenance organizations and eliminate the cap on the highway use tax on luxury cars. It also would lower taxes for some taxpayers, by increasing the standard deduction for married couples and raising the child tax credit.
Opponents of the plan say it more accurately should be called a $ 600 million tax package, because it also gives local governments the option of raising the local sales tax by a half-penny. That extra tax burden was not factored into the $ 440 million figure used by Easley.
For several hours under the hot afternoon sun, anti-tax demonstrators, some of whom had arrived by the busload, milled about the Legislative Building. They chanted “No new taxes,” indoors and out, at one point breaking into the mantra from the House chamber’s gallery.
The protesters cheered when local talk-radio host, Jerry Agar of radio station WPTF, began his Tuesday afternoon broadcast live from the government mall. And they criticized Easley and lawmakers for pushing a tax increase at a time when the economy is in flux and when families are struggling more than ever to make do.
“I’m sick and tired of paying too much in taxes,” said Sue Eaton of Raleigh, who attended the rally with her two children, Jared, 3, and Jake, 6. Eaton is homemaker; her husband is an engineer at IBM.
“We are seriously considering leaving if they keep raising our taxes,” Eaton said. “I’m not anti-government. I’m for government with limits.”
Legislative security officers removed Mary Copeland of Mebane from the Legislative Building after she tossed about a dozen tea bags from the House gallery onto the floor during session. She was warned that she would be charged with trespassing if she returned.
“One popped down right in front of me,” said Rep. Bob Hensley, a Raleigh Democrat. “At least it wasn’t grenades. I try to look on the positive side.”
Richard F. “Dick” Carter, a retired military equipment manufacturer from Wilmington, was directed to leave the chamber after he tried to speak from the House gallery, inspiring fellow protesters to start chanting.
“It was a chorus,” Carter, 78, said. He said he was trying to get lawmakers to listen to the protesters.
“I don’t care about political parties,” Carter said. “It’s what they’re doing to our society. These are the people controlling our monetary future.”
House Speaker Jim Black said he respected people’s right to be heard but expected them to behave.
“They throw a few tea bags; next might be a shoe or a bottle,” Black said.
Organizers of the Tar Heel Tea Party, including the John Locke Foundation, the state chapter of the national tax group Citizens for a Sound Economy and the N.C. Republican Party, claimed success.
John Hood, president of the John Locke Foundation, said he thought the turnout was great given that the idea for the rally was born just six days ago – on Agar’s afternoon radio show on WPTF in Raleigh.
Hood estimated the turnout to be at least 1,000, the figure for which organizers had hoped. But an estimate by Capitol Police put the number closer to 600.
Advocates for various human services also weighed in on the tax debate, saying that North Carolina’s most vulnerable residents, from children to the blind to the mentally ill, would suffer if taxes aren’t raised to generate new revenue.
“North Carolina has a revenue problem, not a spending problem,” said Pam Seamans, chairwoman of the Covenant with North Carolina’s Children.
During the House session on Tuesday, House Minority Leader Leo Daughtry, a Republican from Smithfield, asked Black whether he planned to put the proposed tax package before the full House this week.
“It will not be on the floor this week,” Black said. “We’re still in the process of trying to build consensus on both sides of the aisle.”
