The budget debate

The Legislature isn't going to meet a deadline to get a final North

Carolina state government budget approved before the new fiscal year

begins Wednesday, July 1. Negotiators made progress this week toward

reaching a compromise on a spending plan for the next two years. But

there are still many differences and a tax package that would generate

nearly $1 billion next year also has yet to be finalized.

The House Appropriations Committee Thursday approved a temporary

spending measure that directs how government agencies will keep

operating through July 15, giving negotiators an extra two weeks. The

Senate version of the so-called "continuing resolution" contained no

expiration date.

The full House is expected to take up the stopgap spending bill

tomorrow night, giving the two sides more than a day to get a final

version passed and signed by Gov. Beverly Perdue before Wednesday.

Keys to the budget debate:

• Democrats estimate state is facing $4.6 billion deficit and some form

of new tax revenue will be needed. The Associated Press reports the

Republicans believe the deficit is much less and no new taxes are

necessary.

• The House plan would raise the sales tax by a quarter of a penny and

creates a new individual income tax bracket for the highest wage

earners.

• The Senate plan would lower sales and income tax rates while

expanding the number of services subject to the sales tax. The Senate

proposal also would raise taxes on retail electric users and cigarettes.

• Budget cuts are still being debated in education, corrections and

health and human services.