Budget sets up fall's fights

Spending battles ripe for campaigns

With all 120 House seats and 50 Senate seats up for election this fall, and no high-profile statewide contests vying for voters' attentions, the $18.9 billion budget will provide plenty of campaign fodder.

Democrats, who control the House and Senate, were primarily responsible for putting the budget together. So they may find themselves having to defend the budget.

Even though a few Republicans voted for the budget, they will be on the attack as they try to pick up enough seats to gain control of the House and Senate.

The House passed the budget 82-35. The vote in the Senate was 32-16.

No Democrats voted against the budget in either chamber. Four Senate Republicans and 22 House Republicans voted for it.

Here are some of the issues voters are likely to hear about between now and November:

Not enough tax relief

With a $2.4 billion surplus, Republicans say the budget should have cut taxes further.

The quarter-penny reduction in the sales tax and the quarter-percentage-point reduction in the income tax for those in the highest income bracket still do not bring those tax rates back to their pre-2001 levels. That was the year lawmakers approved a half-cent increase in the sales tax and a half-percentage-point increase in the income tax. Both were supposed to expire in two years.

Republicans also wanted to see a rollback on the state gas tax, but the budget caps it at the current rate of 29.9 cents per gallon.

Democrats will tout the tax cuts, along with a $250 tax credit small businesses can receive per employee for providing health insurance.

Mortgaging the future

The budget is nearly 10 percent more than last year's and pays for roughly $500 million in ongoing programs with revenue that might not be available on a yearly basis.

Think of it as using a small inheritance to cover your mortgage payment. Which relative do you expect to die so that you can make next month's payment?

Don't be surprised to see ads criticizing lawmakers as big spenders who have left a budget hole to fill.

A cleaner budget

Past budgets have drawn controversy for spending, often slipped into the budget late in the process, on pork-barrel projects that benefit favored lawmakers' districts and for major policy provisions that have little to do with the budget.

Lawmakers cut down on the pork and the policy provisions this year.

But the budget includes two items that will be closely watched for potential pork: a $10 million "reserve fund" for vaguely defined economic development projects, and $15 million in grants for community colleges for construction projects and equipment needs.

Tough on crime

Seventeen additional district court judges, 90 additional prosecutors, six additional magistrates and 75 additional deputy court clerks are in the budget.

Lawmakers will use those numbers to inoculate themselves against "soft on crime" charges.

Property tax relief

Counties have long complained about having to pay for rising Medicaid costs over which they have no control. The budget caps the counties' Medicaid share at 2005 levels, saving them a combined $27.4 million.

Democrats will boast about the expected property tax relief. Republicans will charge that the cap is a one-time fix.

Education

There is hardly an area in the state's schools, universities and community colleges that wasn't boosted by the budget, which spends nearly $950 million more on education than last year.

Democrats know their strongest argument on the campaign trail has been support for education. Republicans who criticized the budget said it does little to address school construction needs.

Pay raises

The more than 250,000 public school teachers, state employees, UNC professors and community college instructors make a substantial voting bloc.

The budget gives them the biggest pay raises they've seen in roughly 15 years, and Democrats will be sure to remind them when they go to the polls come November.

Republicans can pick at the lack of parity, with teachers receiving average raises of 8 percent, while state employees will bring in a 5.5 percent increase.