Raleigh, N.C. – According to news reports, Democratic leaders have tentatively agreed on a spending package for the next fiscal year that will total $20.3 billion (including federal stimulus money).  Democrats have said they plan to raise taxes on North Carolina families and businesses by $1 billion or more as part of their budget plan.  Unfortunately for North Carolina’s taxpayers the Democrats’ final tax package will likely be enacted without normal legislative review, not even the level of scrutiny ordinarily given to routine non-controversial bills. This is because the final budget will be presented to the legislature as a Conference Report which cannot be amended and can only be voted up or down.  The level of uncertainty about this is heightened because of the controversy surrounding many of the tax proposals and because discussions occur exclusively among legislative Democrats largely behind closed doors.

As Democrats try to meet a third deadline for constructing the state budget, their inability to agree on a spending proposal is being felt in the public schools and the state’s courtrooms, by nonprofit organizations, and is also affecting the state’s most vulnerable citizens.  (“Deadlock on N.C. budget being felt,” Winston-Salem Journal, 7/18/09)

Senate Republican Leader Phil Berger (R-Rockingham) said, “The inability of Democrats to finalize the state budget should be and is of concern to all North Carolinians.  Most frustrating is that their disagreements are not over philosophical differences or high-minded attempts to modernize the tax code, they just cannot agree on which tax increases will be most harmful or least harmful to their political futures.  It is time for Democrats to stop playing politics and do what they were elected to do.”

House Republican Leader Paul Stam (R-Wake) argued that the process of constructing the state budget must be done in the open with proper scrutiny.  Tax increases that are being discussed behind closed doors that have not been the subject of committee meetings, floor debate, or the amendment process may be included in the final budget proposal when it is presented in both chambers.  If the process concludes as it has in the past, very few members, Republicans or Democrats, will have had an opportunity to propose amendments or effectively examine the state budget before being required to vote on it.

“We continue to believe the budget process must be transparent.  The Democratic leadership plan to include the huge tax package from the Senate in the conference report will not only violate House Rule 44 (b)*, but prohibit most members, including Democrats, from having any real input into it before voting.  The taxpayers deserve a thoughtful review of both spending and taxes before they are called upon to sacrifice, especially during this recession.  The portion of the final proposed state budget that contains the Democrats’ tax package should be considered as a separate bill, reviewed by each house in committee, and subject to amendment” said Rep. Stam.

*Rule 44 (b), states:  “Only such matters as are in difference between the two houses shall be considered by the conferees, and the conference report shall deal only with such matters.”