The General Assembly resumed a regular pace of legislating this week and the State Budget debate moved to a conference committee appointed to resolve the differences in the House and Senate versions of the spending plan.  The future of the Budget now rests in the hands of those few lawmakers who hold leadership positions on the conference committee.  While legislators are negotiating budget cuts and tax increases, Governor Bev Perdue (D-Craven) has organized a series of rallies across the state aimed at encouraging lawmakers to increase taxes by $1.5 billion.  As the budget debate continues to unfold, lawmakers attend to the daily tasks of attending committee meetings and considering legislation. 

Governor Perdue visited chief budget writers this week and told them she wants a state budget that includes a tax increase of $1.5 billion.  That conversation occurred only hours before she attended a rally at the Old State Capitol in Raleigh where she told the assembled group of teachers that she is championing the tax increase to avoid mass layoffs among their ranks and to avoid increases in class sizes.  Wednesday's rally was the first of several rallies that Governor Perdue has planned across the state.  The $1.5 billion Perdue is requesting is nearly double the tax increase proposed in the House budget and roughly three times that proposed in a Senate tax package published in April by the Senate Finance Committee.  

Capitol news agencies reported this morning that House and Senate lawmakers have agreed in principle that a tax increase of about $900 million is needed to avoid the deepest cuts to the state budget.  That $900 million tax increase is a key piece to the budget puzzle, which, once in place will define the parameters for spending for the next two years.  The tax increases would likely include a combination of the changes proposed in the House budget and changes proposed in the Senate plan designed to modernize state taxation.  The modernization plan would broaden the base of the sales tax to include many services not presently taxed and apply the franchise tax to all limited liability businesses.  As a part of expanding the reach of those and other taxes, the rates of each would be reduced by an amount that is currently the subject of negotiations.  Other details such as mandatory combined reporting for multi-state corporations, a proposed throwback rule, and other details remain under discussion.  The Senate plan also includes increased taxes on beer, wine, liquor and cigarettes that have been under discussion during the legislative session.  Two new items appearing in the $900 million proposal include a gross premiums tax on insurance policies and an increase in the sales tax applied to electricity for non-manufacturing uses.  Lawmakers are making a serious effort to pass a State Budget prior to the beginning of the next fiscal year on July 1, 2009. 

Outside of the state budget debate, the House and Senate were actively moving legislation this week.  Thursday, the Senate gave approval to legislation (House Bill 1523) that would enact sweeping new laws for the mortgage lending industry as a part of the national "SAFE Mortgage Licensing" movement.  Also, an expansion in tax credits for the film industry (Senate Bill 943), and legislation to amend rules related to utilities' use of cranes (House Bill 703) were given Senate approval on Thursday and now go back to the House.  On Thursday, the House gave final approval to Governor Perdue's appointments to the Utilities Commission (Senate Joint Resolution 1101) and returned to the Senate a bill that would ban plastic bag use in several coastal counties (Senate Bill 1018).  The House also sent to Governor Perdue legislation that would deregulate the phone industry (House Bill 1180) and would allow counties to rescind an advanced property tax appraisals (House Bill 1530).  

Earlier in the week, the Senate approved stiffer penalties for the theft of scrap metal (House Bill 323) and passed bills requested by the Department of Insurance related to insurance company financial reporting (House Bill 1314) and technical changes to the insurance laws  (House Bill 1183).  In legislation sent to Governor Perdue this week, portions of Highways 17 and 70 in Eastern North Carolina would be designated the "The U.S. Marine Corps Highway:  Home of the Carolina-Based Marines Since 1941," in honor of the historical contributions of the U.S. Marine Corps and its base at Camp Lejeune.