FOR IMMEDIATE RELEASE 
July 27, 2007

Ignoring a second consecutive budget surplus in excess of a billion dollars (2005-2006 surplus $2.4 billion; 2006-2007 surplus $1.5 billion), legislative Democrats have again elected to hike taxes and spending in their 2006-2007 budget.  Although Democrats have not yet made copies of the budget available, media reports indicate that the Democrats have agreed to a $20 billion dollar plus spending plan that calls for increased taxes on numerous items including sales, land transfers and tobacco. 

This budget also continues the Democrat practice of using special provisions in the budget to affect major policy changes.  Issues, such as Medicaid and the land transfer tax, reducing the amount of lottery money going to education programs, creating a new welfare program by giving income tax refunds to people who pay no income tax via the Earned Income Tax Credit, should be considered independently and receive an up or down vote rather than being crammed in the budget with little or no discussion. 

Republicans have offered alternatives to the Democrat’s “tax, tax, tax, spend, spend, spend” plans.   The Republican alternative budget plans included a $2 billion bond to address North Carolina’s growing transportation and infrastructure needs, a balanced budget that reduced personal and corporate income taxes and the sales tax, and funded government services and obligations at levels supported by Democrats.  Democrats ignored Republican proposals, and working behind closed doors, adopted a “tax, tax, tax, spend, spend, spend” budget plan that hurts North Carolina’s families and businesses. 

Senate Republican Leader Phil Berger (R-Rockingham) made the following statement:

“It has consistently been said the problem is not that the state taxes too little, but that the Democrats in the legislature spend too much.  With a $1.5 billion surplus in Democrats’ hands, including $375 million in “found” money after Senate hand House budgets were passed, there is no reason for tax increases.  Democrats ignore the fact that North Carolina taxpayers already shoulder the heaviest tax burden in the southeast and one of the highest in the nation.  The people of North Carolina should be able to keep their hard-earned money rather than giving more than ever to the state.

“For the twentieth consecutive year, Democrats will say this is the best budget for education ever.  How can they make this claim and reduce the amount of lottery money going to education?  At the same time, they doing nothing to address North Carolina’s skyrocketing drop-out rate. 

“Rather than using the $1.5 billion surplus to improve North Carolina’s deteriorating, congested roads, Democrats have opted, once again, to transfer $172 million from the Highway Trust Fund.  Republicans offered a solid plan to keep road taxes for roads.

“Even though only a select few Democrats have actually seen the budget at this point, it is anticipated that all legislators will be expected to vote tomorrow.  Having been in session for over 100 days, it seems unreasonable to pass the largest order of the people’s business in less than 24 hours.”   

###