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How the Democrats raised your taxes — just because they could

By Rep. Paul Stam

A recent report by the state controller provided an accounting for the total spending by North Carolina for the 2008-2009 fiscal year. In a surprising revelation, the “gap” between the expenditures last year and the anticipated revenues for this year, without tax increases, was only $338 million.

This is in stark contrast to the Democrats’ constant assertion of a budget hole exceeding $4.5 billion for the current fiscal year. Democrats increased taxes by almost $1 billion to cover their exaggerated imaginary shortfall.

During the run-up to proposing a new state budget, the Democratic leadership issued warnings to teachers, mental health providers, state employees and other receptive groups that without massive tax increases essential jobs and programs would be slashed (“N.C. House eyes stark spending cuts,” News and Observer, June 4, 2009).

As recently as July, the News and Observer reported, “Revenue next year is expected to be more than $4 billion below what it would have taken to keep funding programs and services at recent levels, and Democrats have described the deficit as $4.5 billion or more” (“The new plan: More taxes for all,” N&O July 22, 2009).

The state controller reported 2008-2009 total expenditures, including federal stimulus funds of $19.7 billion. According to the official General Assembly estimate, revenues for the upcoming year would have been $17.9 billion (without the tax increase) with an additional $1.4 billion in federal stimulus money for a total spending availability in 2009-2010 of $19.3 billion. This leaves a difference or gap of $338 million.

Taxes were increased by Gov. Perdue and the Democrats a total of $990 million. This will provide $652 million more revenue than required to spend the same as during the previous year.

The recently adopted, Democrat-crafted budget anticipates spending $20.4 billion in the upcoming year for a robust 3.867 percent increase over the $19.7 billion in 2008-09.

In previous public statements and during floor debate, I presented to the House statistical information that the real gap between expenditures in 2008-2009 and planned spending for 2009-2010 was ultimately $1 billion (counting stimulus money) or $953 million (not counting stimulus money). Now that accurate numbers have been ascertained from the Office of the State Controller and the General Assembly’s Fiscal Research Division, we now know the real gap was only $338 million.

This is far less than the $4.2, $4.4, $4.7 billion gap consistently proclaimed by Gov. Perdue and the Democrats’ allies. Clearly, we could have balanced the budget without any tax rate increases simply by continuing the level of spending that had been in effect since approximately January 2009.

Rep. Paul Stam is the Republican House leader. He represents Wake County in the House of Representatives.

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