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North Carolina Draconian Cuts or Sales Tax Increase


In what may or may not become a politically damaging move, North Carolina Governor Bev Perdue advocated a ¾ cent increase in sales tax to help fund education. The education system is at the forefront of the debate, with numbers flying around on what the education system has received, what cuts they have had to make and whether a sales tax increase would really benefit the system.

The concern is led by the fact that “…the last of federal stimulus money for school jobs will be gone. More than $250 million in federal money is supporting 5,000 school jobs this year.” The legislature and Perdue have apparently disagreed about adding this tax back into the system—former a tax increase of this amount was due to expire last year and Perdue proposed extending it to support school funding. The legislature disagreed, “…let the tax increases expire and wrote their own budget without that revenue. Perdue vetoes the legislature’s budget, and the legislature canceled her veto.”

In this school year alone, 530 teachers were laid off, 6,383 positions were eliminated and 2,418 employees were laid off. Of those eliminated jobs, 1,724 were K-12 teaching positions.

What does the public think? Apparently, there are positive responses to Perdue’s suggestion but also a fair amount of negative dickering on social media regarding her position. “No new tax” has been the mantra in many states, but House Minority Leader Joe Hackney (D) from Orange County, says he will support her proposal. He says, “It’s a bad idea to do Draconian education cuts in an election year…. Absent this, [sales tax increase] there would probably be other further and deeper cuts.”


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”