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North Carolina chamber passes $17.2 billion budget

Posted on: Thursday, 11 August 2005, 13:58 CDT

MIAMI (Reuters) - North Carolina's House of Representatives gave final approval to a $17.2 billion budget that raises the state tax on cigarettes, keeps some expiring taxes alive and increases pay for state workers.

The two-year plan calls for an 8 percent increase in overall spending from the previous $15.9 billion budget and was passed on Wednesday by a vote of 61 to 59 in the state's Democrat-run lower legislative chamber.

The Senate, however, has yet to give final approval to the budget for the fiscal year that began on July 1. The bill calls for an increase in tobacco-growing North Carolina's cigarette tax to 30 cents a pack from 5 cents, the lowest in the country, and another 5-cent rise next year.

The proposed budget bill also keeps in place for another two years a half-cent increase in sales taxes that had been due to expire and an 8.25 percent income tax rate for the North Carolina's highest-income households.

Some state agency fees were hiked, as well as taxes on liquor, candy and satellite television.

The new and retained taxes were forecast to add more than $600 million to state revenue.

The budget, which has been delayed by disputes over the cigarette tax and the size of wage increases for government employees, gives state workers a 2 percent wage increase and an additional week of vacation and teachers a 2.24 percent raise.

A final vote in the Senate on the proposed budget, whose outlines were hammered out in talks between leaders of the House and Democrat-controlled Senate, was expected this week.

The Senate tentatively approved the measure on Wednesday but has yet to give its final approval.

Source: REUTERS

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