05/24/10 — Local legislators discuss budget over breakfast

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Local legislators discuss budget over breakfast

By Steve Herring
Published in News on May 24, 2010 1:46 PM

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State Sen. Don Davis, left, jots down some notes as he talks with Commissioner Andy Anderson following Friday morning's legislative breakfast sponsored by the Wayne County Chamber of Commerce.

Members of Wayne County's legislative delegation Friday morning appeared to be as divided along chamber lines as they were parties as they traded good-natured jabs over the state budget, proposed cuts and fast-track efforts to finalize the spending plan.

They also sought somewhat to shift responsibility for cuts to each other, though they did agree the budget is an imperfect mixture of good and bad.

Sens. Don Davis and David Rouzer and Reps. Efton Sager, Van Braxton and Larry Bell were guests at the Wayne County Chamber of Commerce's legislative breakfast at the Goldsboro Country Club.

They were questioned as well about their stands on collective bargaining for law enforcement, the highway funding formula, the high school dropout rate, state ports and taxes.

Davis, D-Greene, said the Senate had sent a "reasonable" if "not perfect" budget to the state House after only being in session for a week.

He said it is not time to look at expensive expansions, such as a new dental school. The budget needs rather to focus on community colleges and smaller colleges like Mount Olive College.

"You don't see a tax increase in this plan," he said. "It is important to hold firm on the tax rate with the way times are."

Sager, R-Wayne, said he was concerned about the budget timeline and that he would like to see the state come around to the zero-based budgeting used by counties.

"One sad thing I want to tell you is that there are a lot of fees in this budget," he said. "There is no tax increase, but there are a lot fees. I am going to work to try and cut some of those fees out."

Sager agreed that program cuts had been made, but that more are needed.

"We cannot fund everything," he said.

Rouzer, R-Johnston, told the audience that the state would not quickly rebound to where it had been prior to the recession. He said state government needs restructuring to better meet critical needs and to get the economy moving.

"I voted against it (budget) and I will tell you why, this budget is a patchwork approach to get us through to next January," Rouzer said. "Next January we are going to have a $3.1 billion, $3.4 billion deficit."

However, Bell joked that the budget was now in the House to be "fixed" -- a job they hope to have done by June 15 so that the conference committee can iron out the differences between the two chambers by June 30.

"We found the K-12 budget cut more than it should, while the community college budget looked pretty much intact," he said. "Where are we going to get students for the community colleges if we don't get them from pre-K to 12?

"We had $13 million for dropout prevention and all of that has been cut out."

Braxton, D-Lenoir, also expressed concern for funding for health and human services.

On the revenue side, though, he agreed with Rouzer that the state's tax system needs to be modernized.

"It is a moderate tax system, but it is outdated," he said. "I think we really need to look at doing away with corporate income tax and limiting, if not doing away with, individual income tax. You have to get the revenues from somewhere so where are you going to get them? I think sales tax is fair, especially since we don't charge any state tax on food."

Services are increasing and could be a taxing route to look at, he said.

Asked by local Realtor Hal Keck to explain how such a system might work, Braxton used his automotive business as an example.

"If you brought your car in and needed front brakes you would pay sales tax on the brake pads, but you didn't pay sales tax on the service as far as the labor of installing the pads or if you wanted to service the brake rotors. You don't pay a sales tax on that," he said.

There are a multitude of such services that could be taxed, he said.

"If you call a man to come and work on your washing machine and the water pump has gone bad you pay tax on the water pump, but not on the labor or service to install that," he said.

The key, he explained, is finding an alternative to corporate taxes, which are relatively low revenue generators that many states have done away with, making them "a little more inviting" to new business and industry.

"One of the scenarios being looked at is doing away with corporate income tax, doing away or severely limiting personal income tax, but charging the tax on certain services," he said. "There are roughly 150 to 160 services out there, everything from your doctor to our accountant to your attorney down to your grass cutter, your barber."

The business would pay no additional tax, it would be on the individual who uses the services, he said.

Other issues brought by audience members included Sheriff Carey Winders asking for a "yes or no" response and on the national effort to unionize law enforcement and first responders.

"We all know that salary is a big issue," he said. "We are asking that you contact your colleagues... we do not want it (unions) involved with law enforcement."

Braxton said he was not "a union kind of person." One of the things that have made the state what it is today is the Right to Work law, he said.

"I think corporations have moved here for that reason," he said. "I go back to when I worked at Goodyear. The plant was never union. Yet anything the northern union plants got, that plant got. I am not for unions. I am not for state employees being in a collective bargaining type union. I think they are their best advocates. I probably have 6,000 state employees in my district. Do you not think I will listen more to them than some union guy? I do not think our law enforcement folks should be unionized."

Sager and others agreed, though Davis said much would depend on federal actions.

Another issue was that of possible changes to the DOT highway funding formula, which Chamber President Steve Hicks said they opposed, especially those that would help larger counties and cities at the expense of eastern North Carolina. It also is important to keep highway corridors, such as U.S. 70 Bypass, open as well, he said.

But legislators don't see that formula being subject to discussion this session.

One final issue discussed by the audience was the student dropout age, which county Board of Education member Dave Thomas asked legislators to look at increasing from 16 to 17 or 18. He said that youths had to be 18 to buy cigarettes and 21 before they could purchase alcohol but can walk out of school at 16.

When they drop out at 16 they just start walking the streets, he said.

Davis said he is chairman of a committee on dropout prevention and that this past week he had introduced four education-related bills, including one for a study for looking at such change.

"In order for me to support moving it to 18 DPI (Department of Public Instruction) has got to show me programs that work that get the kids motivated to get an education," Braxton said. "Just having someone sit at a desk until they are 18 years old doesn't do a thing for me."

However, Bell said, just keeping them off the streets would free up approximately $27,000 a year -- money that could be spent in the schools.