The Senate and House this week appointed members to the Joint Conference Committee on the Appropriations Act of 2009 (Senate Bill 202). Since the negotiations of this committee will involve both proposed state expenditures for the 2009-11 biennium and a variety of tax measures, the conferees include members of the appropriations and finance committees of House and Senate. There are 88 House conferees and the Senate appointed 32 members.
The issue of additional tax revenues likely will be the most challenging point of negotiations, especially since Governor Perdue informed the General Assembly this week that the proposed cuts to public schools were not acceptable and that more tax revenues would be needed. The House version of the Appropriations Act includes roughly $780 million in new tax revenue that would be generated by a permanent one-half of one percent in the state sales tax and higher state individual income tax rates for persons earning $200,000 to $499,999 and for earners with income of $500,000 or more.
The Senate has been working on a comprehensive tax reform proposal that would overhaul the state’s sales, individual income, and corporate tax laws. For example, the Senate would broaden the state sales tax base to include 55 services that are not currently subject to sales taxes (examples: house painting, lawn care, car repairs). However, the state sales tax rate would be reduced from the current 4.75% to 4.0%. The Senate proposal also would make extensive changes to the individual income tax exemptions and exclusions but also lower the tax rates applied to the various brackets.
The House included appropriations to restore the Teachers’ and State Employees’ Retirement System (TSERS) to full funding in both years of the biennium. The House budget includes $29 million in 2009-10 and $358 million for 2010-11. The Senate budget proposal only includes the $29 million for the first year.
We urge our members to contact members of the House and Senate, especially members of the budget conference committee, to ask that they adopt the House position of TSERS funding. You can check to see if your representatives and Senators are members of the conference committee by going to the General Assembly web page at: www.ncleg.net. The conferee lists are under “New—Budget Conferees”
BUDGET CONFEREES GET TO WORK
RETIREE ACTION REQUESTED