After weeks of closed-door budget negotiations, the governor and General Assembly offered competing budget proposals on Thursday.
Prompted by a new agreement over the size of the deficit – 8.55 billion dollars over the next two years – the governor and legislature’s Democratic leadership both offered new proposals.
For the first time, the governor included tax hikes in her plan. She’s not targeting higher income earners, but smokers and drinkers.
“These are taxes for the most part in the sin taxes that people can avoid if they want to. They don’t have to smoke. They don’t have to drink”
Her budget would also impose a 3-year 10 percent surcharge on corporate taxes. In all, the new proposals would raise less than 400 million dollars.
In contrast, the Democrats tax increases would raise 1.8 billion in new revenues. They also rely on a cigarette tax and corporate tax surcharge, but most of the new money would come income tax increase for the wealthy. It would go up from 5 to 6 percent for couples making more than half a million dollars a year, and increase gradually to a rate of 7 percent for those earning more than $750,000.
House Finance Committee Chairman Cam Staples says based on recent budget talks and these proposals, he believes a budget deal is close.
“I don’t think it’s a panacea, but I do that today will be the first day that we’re publicly laying out two budgets that match the same number. And I think the value of that is hopefully everyone will see what the tradeoffs are.”
For her part, the governor said she would veto the Democrats latest budget. She also released her latest spending plan for August in an executive order. That’s how the state has kept running since it started this fiscal year without a budget. Just two other states – Pennsylvania and North Carolina – are still without budgets a month into the new fiscal year.