N.C. governor wants higher sales tax for education

By Gary D. Robertson

RALEIGH, N.C.

Democratic Gov. Beverly Perdue used permanent marker Tuesday to outline part of her 2012 re-election campaign strategy, announcing that her budget proposal would seek to raise taxes to restore public education cuts that she's blamed on Republicans at the legislature.

Perdue said her spending proposal for the year starting July 1 will call for a temporary sales tax increase of three-quarters of a penny, revenue that would be dedicated to public education. That would raise the amount of sales tax that consumers in most counties pay from 6.75 percent to 7.5 percent.

"Education is the key to our children's future and to North Carolina's economic future," Perdue said in a statement. "Investing in education is central to our ability to attract new jobs and businesses to our state. We owe it to our children and our state to stop these cuts and make education a priority again — a fraction of a penny for progress."

Republicans immediately panned the idea, calling it another tax increase from Perdue.

The GOP majority at the General Assembly had pledged to let expire a penny sales tax that Democrats had placed on the books in 2009 at the height of the recession. Perdue had offered last year to set the sales tax at 7.5 percent, instead allowing the full penny to expire on time at a cost of more than $1 billion in lost revenue. The higher taxes would keep money out of the pockets of consumers and businesses, GOP leaders said at the time.

Perdue's "attempt to nip this economic recovery in the bud is dead on arrival at the General Assembly," Senate leader Phil Berger, R-Rockingham, said in response. "Gov. Perdue's latest tax-hike stunt proves she can't fix this mess she made."

The announcement by Perdue was made during a visit to Greensboro's Archer Elementary School, four months before the legislature returns to town for its budget-adjusting session. It appears to set the stage for a re-election campaign issue between her, the new GOP majority and likely party gubernatorial nominee Pat McCrory over taxes and education. Perdue's office said her idea would cost the average household about $15 per month.

Perdue is taking a calculated risk by sticking her neck out on taxes, said Eric Heberlig, an associate political science professor at the University of North Carolina at Charlotte. He said the choice for voters may be whether they want more education spending or lower taxes.

"She's trying to draw a clearer contrast in the election. Rarely do politicians emphasize tax increases in an election year," he said. Southern Democratic governors have performed well when they highlight their commitment to public education, according to Heberlig.

"That is one element of government that most people like. It is something that suburban swing voters are willing to pay for," he said.

The expiring sales tax meant fewer revenues for Republican budget-writers, who had to look for additional cuts in education and health care, where nearly 80 percent of the state's $19.7 billion annual budget is allocated.

Thousands of local education positions were eliminated this past fall, but Perdue and Republican legislators have been in a semantic fight for months over how many of these positions were actually filled and whether the state budget was to blame for them.

Perdue's office said later Tuesday the additional revenues also would be used to help the University of North Carolina and community college systems, which like the public schools had to operate following hundreds of millions of dollars in spending reductions in this year's budget. The UNC system said it cut more than 3,000 employees, most of them part-time and temporary workers, due to required budget cuts.

Perdue vetoed the two-year budget last June, but a handful of House Democrats joined all GOP lawmakers in both chambers to override her veto and enact the budget anyway.

Partisans and advocates on both sides of the issues lit up the social media after her announcement, with children's advocates and Democrats praising the governor.

"Since the budget was passed, classroom sizes have grown, early childhood slots have shrunk, student tuition has shot up and access to health care has decreased," a statement said from Together NC, a coalition of 130 nonprofits and service providers. "Today, Gov. Perdue charted a forward-looking path for North Carolina and Together NC applauds her for her leadership."

Perdue didn't provide more details Tuesday about her budget, saying that more would be offered in the days ahead. Perdue's two-year budget last year estimated three-quarters of a penny would have generated $864 million for the year starting in July.

Democratic Rep. Bill Faison of Orange County, who's been talking around his own bid for governor without formally committing to one, has been peddling a plan that would raise the sales tax to 7.4 percent to restore education positions and private-sector health care jobs related to Medicaid. Faison has predicted Perdue won't file as a candidate.

"The governor has finally stepped up and proposed what I have been calling for," Faison said in a prepared statement, adding that he's "happy to see that she understands that our proposal is the only way to restore opportunity for the unemployed and education."

Perdue's campaign has said unequivocally she's running for re-election. A spokesman for McCrory, the former Charlotte mayor, accused Perdue of running in the 2008 campaign by saying it was the wrong time to raise taxes.

"North Carolinians will soon get a vigorous debate about the status of our education system," McCrory spokesman Brian Nick wrote in an e-mail.