This forum runs from 11:00 to 12:15. Scheduled speakers are:

Robert Pittenger, NC Senator from Mecklenburg
Nelson Dollar, NC Representative
Art Pope, Former NC Legislator
Mike Walden, Professor, NC State University
Jameson Taylor, Policy Fellow, Civitas Institute.

(Programming note: the camera is suddenly not working. Yikes. It just won't turn on. And yes, I tried a new battery.)

Nelson Dollar:

The current budget process is a joke. The committee met to "approve" various parts of the budget. He attended the committee meeting, and the committee members didn't read anything, they were just told to approve the budget. The Democrats passed it without question.

The current budget will also be raising taxes this year, requiring taxes on all services in the state to bring in huge amounts of new money to the legislature. There is likely to be a huge increase in taxes and fees and perhaps even allowing towns and cities to create and raise new taxes themselves. There has been much discussion about "modernizing" taxes, but NO discussion about the modernization of SPENDING.

Dr. Michael Walden -- works with consumer economics:

When talking about taxes, he will combine local and state taxes. Then consider all the income of the state of North Carolina as a pie. Over the last 30 years the slice (of tax income) has increased from 9% to 11%. Property taxes have stayed the same; sales tax has increased slightly; corporate income taxes has trended down a little; transportation taxes (gas and vehicles) have gone down; but there's been a jump in income tax. 1.3% to 2.3% -- that's a HUGE jump. Fees have increased from 2% to 4% today.

If a tax bracket is not indexed for inflation -- the federal government does, but North Carolina does not. So if you make more income, just enough to keep up with inflation, you will be pushed into a new tax bracket and actually be forced to pay more in income taxes.

Spending in NC has increased from 11% to 15% today (of all money spend in NC?). Higher education has been taking much more of the economic pie. Public safety has increased from .7% to 1.2%. Highway spending has gone down from 1.5% to 1.0%. That's one reason why NC roads are in bad shape. The big mover in the budget has been transfers- any government program that takes government money to either supplement income of individuals or purchase things for them. Transfers has gone from 2% of the economic pie to 4.5% today. Medicaid spending is the largest single increase.

He also mentioned that the education system, specifically the higher education is perhaps attracting more students than they should. More students are showing up that really aren't motivated because of the very low rates and high subsidies the government spends now.

Art Pope:

Bad politics leads to bad policies. The Democrats in the General Assembly go through very predictable patterns. When times are bad, the Democrats pass tax increases because they want more money for government. Then, when times are good, Democrats never reduce the taxes.

When the Republicans last controlled the House (1998), they left over $1 billion surplus. In 1999 when the Democrats took power back, with a good economy, the Democrats increased spending 8.6% in 1 year: over $1.1 billion. When the economy slowed down, they were caught with a shortfall. In 2001, after 9-11, they passed another budget that had a HUGE shortfall -- with dozens of so-called "temporary" tax increases -- which are still in place TODAY.

Democrats continue to claim they support tax cuts, but they keep passing tax increases each and every year. This year we over-collected almost $1 billion in taxes. But no taxes were repealed. There is a projected increase of $1.5 billion for this next year. That's almost $2.5 billion MORE than the government had last year. Based on the governor and the House budget, they are somehow SHORT $230 million. Yes, you read that right -- they collected almost two and a half billion MORE dollars, but they STILL claim that they don't have enough money to spend!! No Democrats are making any suggestions to give that money back to the taxpayers or to reduce taxes in any way.

North Carolina is giving away money everywhere. They're giving money to companies, including Chinese communists -- they know better than citizens how to "work the system." Google and Dell are taking tax money away from working citizens.

People need to call their NC legislators and tell the elected officials that they are exercising their constitutional rights to advise those legislators to not pass those bills. People need to remind the legislators that it's their constitutional right because the legislature recently passed a law to make it more difficult for people to contact legislators without registering.

Robert Pittenger:

Democrats want to keep things they way they are. Those who are in power want to stay in power -- and most people don't want to change. We have the highest corporate and individual taxes in the southeast. If we reduced $320 million in spending, we could reduce the corporate tax rate by 2%. NC's tax rate is 2% higher for corporations than South Carolina.

Look at how Bush's tax cuts have stimulated the economy. There's been a 35% increase in the federal coffers because of the tax cuts. NC has lost 400 companies in the last couple years who have moved to SC and VA because of the heavy tax burdens. TN doesn't have any individual taxes at all. We are losing businesses every day due to the heavy tax burden. Medicaid expenses are growing faster than the increases of money coming into the state.

Jameson Taylor:

NC has moved from 25th to 33rd in rankings of the highest taxed states. Spending is the biggest problem. 4.9 private employees now exist for each government employee -- that's the lowest number ever -- meaning the highest number of government employees ever.

NC has also become more dependent on the federal government. In 1996, NC generated 2.19 for each dollar the federal government spent in NC. In 2005 it was 1.56. At this rate, by 2016 The federal government will be the #1 source of income for the state.

While we increase spending on education (even while the population of students is DECREASING), we also have to increase spending on health care for the elderly. We simply cannot keep increasing spending in both areas. We need to reform the system now or leave a legacy of high taxes and a very weak economy for our children.

NC's population is growing faster than other states -- primarily because of illegal immigration. These illegals consume more government services than they pay into the system via medical and educational costs, primarily. Most of the taxes they do pay go to the federal government, not the state government.

To solve these problems, North Carolina needs to save more and stop spending. This will take serious, basic reform. We need fundamental tax reform. He encourages everyone to focus on one particular tax or issue; learn about it; study it; then make your voice heard on that issue.