“It’s very frustrating right now,” said State Representative Melanie Wade Goodwin.
“It’s extremely important to get this budget done as soon as it can get done,” said Senator William Purcell.
The June 30 deadline was extended to July 15 this week because the House and Senate could not reach an agreement.
“The Senate proposed a finance package that was very different from the finance package voted on in the House budget,” said Goodwin. “That and a couple of appropriations items have resulted in difficulty negotiating in the chambers.”
North Carolina needs to scrounge up $4.5 billion dollars. Part of the Senate solution includes broadening the tax base to include more services while lowering the overall sales tax rate. The tax on electricity sales, however, would be raised by three percent.
Meanwhile the House wants to fill most of that multi-billion dollar hole by implementing an across-the-board .25 percent sales tax increase; a few more services would become taxable, but not as many as the Senate wants.
Opinions also differ on the state’s income tax structure. According to watchdog group NC Policy Watch, the Senate wants state income taxes to be based on pre-deduction “adjusted gross income” instead of post-deduction “federal taxable income.” In addition, married couples filing jointly would fall under a zero percent tax bracket for the first $10,000 of adjusted gross income, singles $5,000.
The House wants to create two new tax brackets for the highest earners - 8.25 percent and 8.5 percent. At present, the highest tax bracket stops at 7.75 percent.
But none of that could be concurred on before the end of the fiscal year at midnight on Tuesday.
“The House Appropriations Committee called a meeting last Thursday afternoon; our hopes were to continue negotiating through the weekend,” said Goodwin on Wednesday. “But the Senate advised us they were going home.”
The House added the July 15 deadline to the Senate’s deadline-extending bill.
State agencies are authorized to continue spending at 85 percent of last year’s state budget at the Senate’s request.
“(85 percent) is basically what it had already been cut down to in the Governor (for the coming year)” explained Purcell.
“Honestly, I don’t know how they’re going to make it,” said Goodwin.
Her House subcommittee, Justice and Public Safety, is looking at having to close three prisons under the present version of the budget.
Purcell said he’s had a good experience in Health and Human Services and is hopeful that there is an end in sight.
“We’ve made a lot of draconian cuts, and none of us liked to make them,” said the Senator. “But we’ve worked together in a very good manner with the House (counterpart committee). And we’ve been told me may get some additional money.”






