THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, May 14, 1996 TAG: 9605140285
SECTION: LOCAL PAGE: B1 EDITION: NORTH CAROLINA
SOURCE: BY PAUL SOUTH, STAFF WRITER
DATELINE: RALEIGH LENGTH: Medium: 96 lines
Rep. Bill Culpepper thinks a proposed rollback of the state sales tax on food items is a good idea, and says passage of a bill to phase out the tax is in the bag.
Rep. Bill Owens isn't so sure, and thinks the proposal should be sacked.
Culpepper, D-Chowan, and Owens, D-Pasquotank, are from neighboring counties, but the state lawmakers are divided over what could be one of the legislative hot buttons of the General Assembly's short session, which began Monday in Raleigh.
Legislation being offered by Rep. Robin Hayes, the GOP's gubernatorial nominee for this fall's general election, would phase out the 4-cent tax over a four-year period. Democratic Gov. James B. Hunt Jr. has a similar proposal in his election-year legislative agenda.
Culpepper expects the tax cut on food, as well as a corporate tax reduction, will be adopted.
``I think the (food tax) issue is very popular in the House,'' Culpepper said. ``It's got an extraordinary amount of bipartisan support. The Republican gubernatorial candidate has that as one of the centerpieces of his platform, and the Democrats tried last session to get a phase-out proposal introduced. I expect it will pass overwhelmingly in the House. But when it gets to the Senate, that's awhole other ball game.''
One of the reasons Senate passage is far from assured is opposition from Senate President Pro Tempore Marc Basnight. He says the state cannot afford to give pay raises to teachers and state employees and fund a $30 million water-quality trust fund initiative while trimming taxes.
Owens holds that same view in the lower chamber.
Owens said that because of the way the bill is written, confusion will reign in small grocery stores throughout his district.
``It's going to cause a lot of problems in rural North Carolina,'' said Owens. ``When you go to the grocery store and pay a 6 percent tax on paper plates, and 5 percent on another item, you're going to have problems not only in collecting the tax, but in recording it as well.''
Owens expressed concern that once the state rollback is completed, that lawmakers may go after the 2-cent local option that generates revenue for northeastern North Carolina counties.
``There's going to be a temptation, once the state tax is phased out, to take away the local option,'' Owens said. ``If that's done, then the counties will face a problem in trying to make up for lost revenue. And I'm afraid they would have to do it through a big raise in property taxes.''
How much would property taxes have to be raised if the food sales tax were abolished?
``It could be 25 to 50 percent,'' depending on the revenue lost by each county,'' Owens said.
Like Basnight, Owens believes it will be difficult to cut taxes, provide pay raises, implement new environmental policies and provide services.
``The tax cut is only going to help the upper-income people and the out-of-town tourists who come here and spend money,'' Owens said. ``It's not going to help the elderly, or working families, or folks on fixed incomes. I think if we wanted this to benefit them, we would give them some form of a tax credit.''
Culpepper, a long-time proponent of the food tax phase-out, said the goals Hunt has outlined for the short session could be met with some fiscal belt-tightening by lawmakers.
``If you begin the reductions on Jan. 1, 1997, I think it will cost us $42 million,'' Culpepper said. ``If you begin it on July 1, 1996, it will cost a projected $84 million. If we can make $369.1 million in cuts as we did last session, I think we can find $84 million in cuts to make this year. It's just going to be a matter of setting priorities, and finding fat to cut. The problem is, state agencies try to hide the fat.''
But on Basnight's proposed water quality trust fund, Culpepper and Owens said it legislative funding priority.
``With the growth of the agriculture industry, we have to do something about agricultural runoff into our waterways,'' Culpepper said. ``And we have to stop discharge into the sounds.'' MEMO: GENERAL ASSEMBLY HIGHLIGHTS
On Monday at the General Assembly:
The House and Senate convened for their 1996 session, expected to
last at least five weeks.
State Rep. Ken Miller, R-Alamance, was formally censured for making
unwanted advances on a teenage page and other women at the legislature
last year.
Republicans and Democrats in the House filed bills to phase out the
state sales tax on food.
House Republicans filed a bill calling for a $950 million school
construction bond vote this fall.
Sen. Beverly Perdue, D-Craven, filed a bill to eliminate the
requirement that taxpayers must file a protest within 30 days of paying
the disputed tax.
House budget-writers questioned whether Gov. James B. Hunt Jr.'s
budget recommendations are balanced, as required by the state
Constitution.
Republican John Blust of Greensboro was sworn in as a new senator,
replacing the late Tom Sawyer, who died earlier this year. by CNB