Coates says tax hike should be last resort

State Rep. Lorene Coates, D-Rowan, said Thursday she could support a tax hike proposal as a last resort, but until then she backs a compromise effort to cut business incentives and close more loopholes.

The state House tentatively approved a $400-million tax hike proposal Wednesday, which would include increasing an array of taxes, including the sales tax by half a cent.

The House plan would allow counties to raise their sales tax rate to compensate for the state taking back $330 million in reimbursements.

Republicans, including Rep. Eugene McCombs, R-Rowan, voted against the proposal, backed by House Speaker Jim Black, D-Mecklenburg. They say the state could still cut wasteful spending out of its proposed $14 billion budget.

“I realize that the reality is that we have to get a majority of the legislators backing one plan,” Coates said, “and I realize that may mean a tax increase.

“But I believe we need to make every cut possible before we raise taxes.”

North Carolina needs more businesses to locate in the state, “but some of these corporations are draining us dry and it just isn’t fair to taxpayers,” Coates said.

The compromise package Coates is interested in would cut all business incentive programs by 20 percent and close 25 percent of personal and corporate tax loopholes.

“I agree with Speaker Black and the others in the Democratic leadership that we can’t cut education,” Coates said, “and I support their efforts to ensure that our children don’t suffer due to the budget crisis.

“I will support his plan over the others I have seen so far — if those are the only options. However, I also believe that we need to take a look at corporate incentives and make cuts there before we ask working folks to make cuts in their household budgets.”

Contact Mark Wineka at 704-797-4263 or mwineka@salisburypost.com .