Bad Time for a Tax Increase
N.C. revenues were up, not down, but Democrats still wanted more
By Senator Robert Rucho

Last week, while you weren't watching, North Carolina's legislature slapped you with the largest tax increase in America. The $1.2 billion tax increase wasn't necessary.

We're facing an economic slowdown evidenced by 5.3 percent July unemployment and rising fear about jobs. The tragic events of Sept. 11 increased uncertainty.

Experts agree it's the worst time to raise taxes.

"It's one of the all-time stupidest things done by a legislature anywhere," said James F. Smith, professor of finance at UNC's Kenan-Flagler Business School. "It's a ridiculous budget . You don't raise taxes in a recession."

For months, the Democrats used an incessant drumbeat to justify tax increases. They claimed, "The state is broke we have a shortfall we need to close mental hospitals and schools for the deaf our AAA bond rate is at risk we need to cut $250 million from education."

It was all smoke and mirrors.

For you and your family, a "shortfall" means having less to spend this year than last. Big Government doesn't think that way.

Last fiscal year North Carolina government collected over $400 million more than the previous year. Over the next two years, before the new tax increase, the state would have collected $1.24 billion more. Hardly a "shortfall."

Over the past decade state government spending grew from $6.9 billion to $14.7 billion, a whopping 113 percent increase. Our population increased only 21 percent.

North Carolina has a spending problem, not a revenue problem. Nothing was done to reduce wasteful government spending. In fact, existing programs were automatically expanded and new programs were created.

Much was said about spending "cuts." The truth is there were no real "cuts." The new budget increases spending by 5.2 percent.

"Business as usual" cannot be the rule of the day. We must review the need and effectiveness of each program before we raise taxes.

After considering the North Carolina economic climate, many reasonable alternatives to a tax hike were offered. Each was rejected with no debate because it didn't fit the Democrat tax-and-spend philosophy.

North Carolina is the only state in America to raise sales tax rates and personal income taxes.

This $1.2 billion tax hike will affect every part of your life; more sales taxes, income taxes, telephone taxes, health insurance taxes, cable and satellite television taxes, and alcohol taxes.

Higher state taxes, along with local property tax increases, will make North Carolina a more expensive place to live, to do business and raise our families.

This budget, supported by all Democrats and opposed by Republicans, was a victory for more government bureaucracy and more control over your life. This action places an additional burden on the backs of working families, and it was a disservice to North Carolina.

You deserve better.

Robert Rucho of Matthews represents District 35 in the N.C. Senate. Contact him at 1113 Legislative Building, Raleigh, N.C. 27601, or by e-mail at bobr@ncleg.net.