South By North Strategies, Ltd.

A new report from the North Carolina Budget and Tax Center analyzes the budget proposal recently released by Gov. Bev Perdue. From the report …

This proposed state budget, released on February 15, 2011, defied the most pessimistic expectations of advocates by avoiding deep personnel cuts in education and health and human services and maintaining critical investments in public structures. In fact, several key recommendations of this budget deserve praise …
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Although the state sales tax remains a disproportionate burden to low-income North Carolinians, the governor’s decision to extend the current state sales tax at 5.5 percent (down from5.75 percent)through the biennium provides the boost in revenues needed to sustain key state services and avoid even deeper cuts in education and health and human services. The budget contains no proposals to alter the personal income tax and does not extend the current 2 percent surcharge on the state’s wealthiest taxpayers.
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However, the governor’s budget is disappointing in that it proposes a corporate tax cut that is unlikely to spur significant job growth. It also relies heavily on the elimination of up to 5,800 state appropriation supported positions – some vacant and some filled – as well as cuts in funding to local governments that could result in the elimination of as many as 4,400 non-teacher positions in North Carolina public schools.