BTC Statement: Gov. Perdue's Sales Tax Proposal Moves Us In The Right Direction

Statement from Alexandra Forter Sirota, Budget and Tax Center

We praise the Governor for her announcement today that she will submit a budget proposal that includes revenue. In so doing, she has put at the forefront of the debate the fundamental driver of North Carolina’s budget woes: a collapse in revenues brought on by the economic downturn and a fundamental need for modernizing the revenue system.

Gov. Perdue’s proposal to include three-quarters of the penny sales tax would raise an estimated $863 million in additional state revenues next year. These dollars could restore hundreds of millions in cuts to classrooms, adequately fund our state’s Medicaid program, serve all eligible children in our state’s nationally-recognized pre-kindergarten program, partially restore cuts to Smart Start and reduce the cost of accessing the courts. This would change the direction set forth in last year’s final budget, which put state investment at the lowest level in 40 years.

All policymakers should consider revenue when approaching the second year of this budget. The sales tax is one option, but so are responsible reforms to personal and corporate income taxes that will ensure North Carolina can invest wisely in structures that support widespread prosperity without placing an unfair burden on working families and those in need. The time is now to start a robust and inclusive conversation about revenue and revenue modernization so that North Carolina can be positioned to best support an economy that works for all.

FOR MORE INFORMATION CONTACT: Alexandra Forter Sirota,, 919.861.1468; Jeff Shaw, Director of Communications, NC Justice Center,, 503.551.3615 (cell).

The N.C. Budget and Tax Center—a project of the N.C. Justice Center—seeks to create economic opportunity and shared prosperity for all North Carolinians through non-partisan research, education and advocacy on budget, tax and economic issues.