Senate Appropriations Chairman Jack Hill, R-Reidsville, warned Monday that the state’s budget hole for next fiscal year is closer to $2 billion than to the $1 billion that’s been discussed.
Hill was in Athens with other lawmakers for a pre-legislative session conference and spoke to WABE’s Denis O’Hayer, the local host of “All Things Considered.” You can hear the entire interview on WABE’s website.
In the the interview, Hill acknowledged that the state’s budget hole for fiscal 2012, which begins July 1, is at about $2 billion and drops to $1.3 billion once you consider the loss of one-time funding or federal cash as well an expected round of cuts to state agencies.
Despite the positive news that state revenues are growing, Hill said it’s not enough.
“The growth rate that the economists tell us we can expect is not high enough to make up for the tremendous hole we have,” Hill told O’Hayer.
O’Hayer asked the next logical question: Where does the money come from? Could it be that the special tax council that has been studying the state’s finances will recommend putting the sales tax back on groceries? Hill said he didn’t know, but A.D. Fraizer, the head of the tax council, will speak to lawmakers in Athens on Tuesday. The council’s report is due to lawmakers no later than Jan. 10, the first day of the next legislative session.
“I don’t find a whole lot of support for [putting the sales tax on groceries] in walking around the halls,” Hill said, acknowledging that he and others need to “educate members of the House and Senate on how deep the hole is and how big the poblem is.”
It’s not an easy answer, Hill said, but the bottom line is the state needs to raise more money.
“That’s what it boils down to,” he said.
There’s no “political” appetite for a general tax increase, but Hill hinted that pairing an income tax cut with a “broadening” of the state sales tax could be one part of a solution. The sales tax has remained flat through good times and bad, he said, which tells him that it’s too narrow — in other words, not enough services or products are subject to the tax.
“I don’t believe a tax increase pure and simple could pass this Legislature,” Hill said.