Perdue wants tax credit and relief

By: JournalNow Staff | THE ASSOCIATED PRESS
Published: March 13, 2009

ASHEVILLE --

Gov. Bev Perdue said yesterday that her budget proposal will expand a tax credit for the working poor and give tax relief to more small businesses in North Carolina.

Perdue laid out several economic-development initiatives during a late-week visit to Western North Carolina.

She gaved a sneak peek into her two-year spending proposal to be released next week, which is also likely to include big spending reductions as she tries to narrow a $3 billion-plus spending gap for next year. A news release gave no details on how she would pay for the tax breaks and other investments.

Perdue said she wants legislators to increase the size of the earned-income tax credit from 5 percent of the federal credit to 6.5 percent.

The credit, which provides refunds and rebates to low-income taxpayers, currently is at 3.5 percent of the federal amount, but it is already scheduled to reach 5 percent next year.

Perdue also said she wants businesses with profits of less than $100,000 to exempt the first $25,000 of net income from state tax, with the amount lowered to the first $15,000 for businesses making between $100,000 and $200,000.

The Senate approved what sounds like an identical corporate-tax-exemption provision in 2004, but it was dropped during final budget negotiations. The price tag at the time was $18 million and would have helped more than 24,000 mostly small corporations.

Perdue said she also would invest $17 million more in worker training and $8 million combined to encourage "green" businesses and expand the state's defense and aerospace industry.

Perdue has scheduled a news conference in Asheville this morning to announce "major probation and parole reforms."

She promised before taking office in January to pursue such reforms after the probation system's shortcomings surfaced last year after the slaying of the student-body president at UNC Chapel Hill in March.