Easley: Help the working poor

The governor uses his annual speech to call for an income tax cut and college assistance

In his final State of the State address Monday night, Gov. Mike Easley sought to help the working poor by cutting their income taxes and giving their children the chance to go to college for free.

Easley said his proposed two-year budget would eliminate the state income tax for nearly 600,000 low-income people and halve it for another 650,000.

"We will send a message in a loud and mighty voice that we place a premium on work and we mean for it to pay off for hard-working people," Easley said.

The governor, however, provided no details on how the tax cut would be implemented. The General Assembly will take up the state's budget within weeks.

Easley, a Democrat nearing the end of his second term, and senior fiscal adviser Dan Gerlach would not answer questions after the speech.

"We're going to have a budget real soon," Easley said.

House Minority Leader Paul Stam, an Apex Republican, said the income-tax cuts are probably feasible because they would affect relatively few people -- and those involved pay little in income taxes anyway.

Stam said he'd support the cuts, provided the governor repeals the temporary sales and income-tax increases adopted in 2001.

That's unlikely. House Majority Leader Hugh Holliman, a Lexington Democrat, said he has been told the governor will keep the quarter-cent sales tax scheduled to expire this year.

Easley had floated the idea of keeping it -- and the more than $200 million it generates for the state. It's not clear how Easley would spend the money.

Now, the statewide sales tax is 4.25 percent. Without changes, the statewide sales tax would drop to 4 percent on many purchases. All counties add 2.5 percent to that, except Mecklenburg, which adds more.

Learn and Earn

Easley also proposed a major expansion of his "Learn and Earn" initiative, which allows students to begin working toward a college degree while still in high school. The program now reaches about 35 high schools; in two years, it would be available to every student, Easley said.

State School Board Chairman Howard Lee said the plan would more than double the number of schools offering the program, plus make it available online to students who are not near a classroom offering college courses.

"It's very doable, and we're geared up and ready to go," Lee said.

Learn and Earn students would also benefit from another Easley initiative that offers a two-year state tuition grant for low- and moderate-income students. Those who receive the grants would have to work 10 hours a week to help pay for their education.

Combined with existing student-aid programs, Easley said those Learn and Earn students could receive a bachelor's degree at a state university debt-free.

"But students, I want you to hear me clearly," Easley said. "This plan is no free lunch. You've got to have some skin in the game. With every opportunity comes accountability. We will supply a grant, but you have to keep your grades up and be willing to work 10 hours a week."

Other proposals to help those in greatest need included expanding the More at Four pre-kindergarten program to another 10,000 children, extending Medicaid coverage to foster children attending college until they turn 22, and expanding a prescription drug program to cover 45,000 more seniors.

Praise and dismay

The 35-minute speech drew praise from Democratic leaders and advocates for the poor.

"I think that it's important for the governor to set the tone that the powerful cannot forget the least of us," said Rev. William Barber, president of the state NAACP.

Republicans criticized the speech for being short on specifics, unrealistic on state spending, and for lacking mention of the state's dropout rate.

They were quick to note the governor said nothing about the scandals surrounding former House Speaker Jim Black, a Mecklenburg Democrat who was a big Easley ally. Black resigned last week and pleaded guilty to a federal corruption charge.

"I have some disappointment with his failure to talk about and address some serious issues that I think people across the state are concerned about," said Senate Minority Leader Phil Berger, a Rockingham County Republican.

Easley's speech drew several rounds of applause, but the standing ovations were mostly limited to the guests he introduced, such as Ashley Williams, 16, a junior at the Josephine Dobbs Clement Early College High School in Durham. Easley cited her as a Learn and Earn success story.

He drew his biggest laugh when he told lawmakers that Williams has now developed the ambition to be governor. That's true, she said, but her ambition doesn't stop there.

"Governor, then president," she said, matter of factly.