taxes

Freedom Budget 2005 continues the tradition of JLF alternative budgets that revise the governor’s Continuation and Expansion budgets. If an item is not included here, the authors accept the governor’s proposal. This includes all pay raises for state employees and some tax changes. The specific recommendations detailed in this report are made as additions or subtractions from Gov. Easley’s budget.

The state of North Carolina and our governor, Mike Easley, received mediocre grades on two recent report cards. Tax increases that were to be temporary when passed in 2001, but which continue in the governor's budget through at least 2006, contribute to the low grades. The additional tax bracket and half-cent sales tax will have added nearly $1.9 billion between their original sunset and July 2007, while Gov. Easley's additional taxes will bring almost as much in FY2006-07 alone.

Governor Mike Easley says his budget for the 2005-2007 biennium is the model of fiscal prudence, but the numbers belie this. Spending increases nearly $1 billion to $16.9 billion. The governor claims $200 million in spending cuts, but they are far outweighed by the $741 billion in higher taxes. Tobacco Trust Fund transfers and unreserved credit balance close the rest of the $1.1 billion structural deficit. The General Assembly will need to be more forthright if it is to put real restraints on government growth.

Counties and towns are a critical level of government in North Carolina, providing or administering many critical services while taking in billions of dollars of revenue. This is especially true as the state government has increasingly shifted more taxing authority to localities to make up for money kept by the state. While the importance of county and municipal government is great, obtaining comparative data is difficult. To help address this, By the Numbers 2004 provides information on how much local government costs in every city and county in North Carolina.

RALEIGH — The North Carolina House has moved with uncharacteristic speed to devise a budget plan for the 2003-05 biennium, but a preliminary analysis by the John Locke Foundation questions…

The North Carolina General Assembly faces a critical choice about the state’s fiscal direction: whether to extend nearly $500 million in tax increases that politicians had previously promised were “temporary,” or to find additional savings to balance the FY 2003-04 budget. Since the taxes were originally imposed in 2001, North Carolina’s business growth has fallen short of the Southastern average and its tax rates remain among the highest in the region and the nation. And according to the Tax Foundation, North Carolina's state/local tax burden has risen to 25th in the nation in 2003, up from 36th in 1998.

North Carolina faces significant fiscal and economic challenges over the next two years. But it need not resort to higher taxes, a state-run lottery, higher debt, or gimmickry to balance its budget. Nor does North Carolina need to skimp on crucial needs such as education and highways. By setting firm priorities within state government, eliminating unnecessary or duplicative programs, and charging users of some services a reasonable price, state leaders can generate sufficient savings to invest in the future needs of the state.

RALEIGH — Even after much-publicized budget “cuts” in each of the past three fiscal years, North Carolina state spending this year is up 80 percent from what it was 10…

North Carolina lawmakers are once again coming to Raleigh to grapple with a projected deficit exceeding $1 billion. A close examination of fiscal trends demonstrates that excessive spending, not inadequate revenue, is the cause and that the state budget continues to be bloated with wasteful or low-priority expenditures. Policymakers must show courage, be willing to apply fundamental principles, and target major areas of state spending for savings and reform.

RALEIGH — Local taxes and fees in Charlotte totaled more than $1,920 per resident in 2001, ranking North Carolina’s largest city No. 1 for local government costs among major cities…