Governor unveils budget plan

Gov. Mike Easley wants to expand funding for all levels of education and raise the cigarette tax, according to his budget proposal released Wednesday.

Easley’s $16.9 billion budget would offset any financial aid cuts by President Bush, including those to Pell Grants, and take on the costs of increased enrollment at colleges and universities, said Ran Coble, director of the N.C. Center for Public Policy Research.

“He’s asking North Carolina to do what the federal government isn’t doing,” he said.

Easley would give community colleges, the UNC system and private colleges $84.5 million more in resources. The budget calls for a freeze on in-state tuition increases at UNC-system schools, as well as $73.6 million for system enrollment growth and $19 million for financial aid.

But the majority of Easley’s additional $532 million in assistance to education wouldn’t go to higher education, Coble said. K-12 is still the priority, but the governor is shifting his focus from the lower to upper grades.

“He’s putting more emphasis on high schools this time,” Coble said.

Easley would expand the Learn and Earn program, which allows students to receive a high school diploma and an associate’s degree in five years.

By the Numbers 16.9 In billions, dollars in Easley's budget 35 In cents, proposed hike in cigarette tax 74 In millions, dollars for college growth 0 Dollars from tuition hikes for residents

A N.C. Supreme Court ruling earlier this year demanding better education for poor areas is likely to be behind an expansion of the programs for disadvantaged and low-wealth students, totaling an additional $41.6 million, said Ferrel Guillory, director of UNC’s Program on Southern Politics, Media and Public Life.

“It’s responding to the Leandro case — that everybody gets a good education, no matter where they are,” he said.

More at Four, the governor’s preschool program, also would be expanded, and more than $150 million would go toward putting more teachers in classrooms of all grades.

Other areas that would receive more state funding are human services, including a $215 million increase for Medicaid; economic development, especially biotechnology programs; criminal justice; and environmental monies that match the federal government’s contribution.

The governor’s heart is where the money is, Guillory said. “The budget is more than just numbers and details,” he said. “It’s an expression of a state’s priorities.”

Taxpayers would fund the added spending, Guillory said. The cigarette tax would rise from 5 cents to 40 cents this year and reach 50 cents in 2006.

The legislature has been resistant to cigarette tax hikes, but support is more likely this year than in the past, Coble said. The recent tobacco buyout protects growers from market blows.

Easley also would keep in place a half-cent increase in the sales tax that was set to end this fiscal year.

That would keep the tax at 7 percent and affect new items such as those bought online, said Joseph Coletti, fiscal policy analyst for the John Locke Foundation, a conservative think tank.

He said Easley proposes to lower the top-bracket income tax incrementally, from 8.25 percent to 8 percent in 2006 and to the original rate of 7.75 percent in 2007.

The governor’s claim to reduce spending by $200 million is misleading, Coletti said. Easley did cut that amount from his last budget — money that was to be used for programs that were never enacted, Coletti said.

But he said Easley added much more spending after that, making the new budget about $488 million dollars more than the 2003-05 budget.

“Ever heard, ‘Lies, damn lies and statistics?’” he said. “You can pretty much switch that to budgets, that last part.”

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