One potential hitch in a state budget deal is the group of 12 Democratic House members who gathered after session Thursday in a windowless room in the bowels of the Legislative Building to discuss their concerns over raising beer, wine and cigarette taxes.

"What we're doing now is cutting the jugular vein" of the tobacco industry, said Rep. Nelson Cole, a Reidsville Democrat who helped organize the meeting. "They're already dying."

Democrats have a 68 to 52 majority in the House. Two members of their party voted against the House's original version of the budget, so they can't afford many more defections. Most, if not all, of the dozen potential dissidents have tobacco, beer or wine interests in their districts.

"It's jobs to us," said Cole, whose district includes a Miller brewery, noting the closing of tobacco giant Philip Morris' Cabarrus County plant this week.

How did Kay Hagan feel about the 2003 budget?

As a first-time cochairwoman of the Senate Appropriations committee, the Greensboro Democrat was quoted about two dozen times on the budget that year.

With Hagan running for U.S. Senate, the budget will come up again.

In the beginning, Hagan told reporters that she wanted to see more cuts related to government efficiency and higher raises for state workers (Greensboro News & Record, March 6). After the Senate put forth its plan, she called it "a good budget" that allocates money "in a wise and careful manner" (Charlotte Observer, April 29) and she worried that revenue would be down (N&R, May 5).

She also staunchly defended two proposed hikes in sin taxes on cigarettes and alcohol saying they are "a lifestyle choice" (N&R, June 12) and that the alternative, a lottery, wouldn't pass (N&O, June 12).

She added that the alternatives were worse: "I'm looking at not going to a four-day school week. I'm looking at not firing teachers. I'm looking at the basic infrastructure of the state, which is education and economic development." (Char-O, June 12)

She also stressed that the budget should be on time (N&R, June 16).

And she defended an additional $10.2 million in fee increases on things such as visiting a state park, operating a nursing home and getting a driver's license included in the budget.

"Those fee increases are very, very small," she said. "Some haven't been changed for years and years." (N&R, July 13)

What taxes were in the 2003 budget?

The first budget partially negotiated by state Sen. Kay Hagan included $14.8 billion in spending, a $400 million increase from the previous year.

The budget will likely come up again in the U.S. Senate race, with Republican Sen. Elizabeth Dole signaling that she will attack Hagan's record.

Here's a few details from the budget that she may focus on:

Temporarily Continued: The budget continued the "temporary taxes" on sales and the wealthy first instituted during a 2001 shortfall and set to expire in 2003. The two taxes were expected to generate about $384 million.

Sin No More: Senate leaders proposed adding 25 cents in tax to a pack of cigarettes and 5 cents to a can of beer, but House leaders shot the idea down. The taxes would have raised $326 million to offset proposed education cuts.

Higher (Cost) Education: Tuition at state universities went up 5 percent, though the budget added $5.1 million in need-based financial aid. In-state community college tuition rose 3.2 percent. For out-of-state students, it was 8.2 percent.

Obviously, there's a lot more to the budget than these three items, but they're the ones easiest to explain to voters in a short attack ad.

Gov. Mike Easley may be courting the legislature.

On the heels of state legislators talking skeptically about his proposed increases in "sin taxes" on alcohol and cigarettes, Easley will reportedly be making a personal visit this afternoon.

It is unusual for Easley — or any other governor — to make their budget pitch directly. They usually leave that to the designated number cruncher — in Easley's case, Dan Gerlach.

This could be a sign that Easley is concerned his budget may not pass. Or he's feeling more gregarious after spending all that time campaigning for Hillary Clinton.

Or he's not coming after all, and this is all a ruse to get us to pay more attention to Gerlach.

Update: Easley's not coming, after all. No word on how the rumor started. 

Republicans object to the so-called "sin taxes."

At a press conference this morning, Republican leaders of the state House and Senate said that the state budget should not raise taxes on alcohol and cigarettes.

"In tough economic times, it is not the time to raise taxes, particularly the taxes that hit the poorest people," said Senate Minority Leader Phil Berger.

He called the governor's budget "an attempt at legacy building."

For their budget priorities, Berger and House Minority Leader Paul Stam called for cutting spending, completely ending the annual transfer from the Highway Trust Fund, putting a roads bond before voters in November and not raising any state taxes.

On non-budget items, they called for lifting the cap on charter schools, putting constitutional amendments banning gay marriage and curtailing the use of eminent domain before voters, making the murder of an unborn child a crime and ending the de facto moratorium on the death penalty.

North Carolina has the fourth-highest state beer tax in the U.S.

The state's current 53-cent per gallon excise tax on beer — which amounts to roughly 5 cents per 12-ounce can — is lower only than Alaska, Hawaii and South Carolina's state tax rates, according to research by the Federation of Tax Administrators.

The lowest state beer tax rate is 2 cents per gallon in Wyoming. The highest is Alaska, at $1.07 per gallon. In addition, some states also have local beer taxes, wholesale taxes and taxes on beers sold on tap, at private clubs and in bars.

North Carolina is currently the second-highest among its neighboring states. South Carolina charges 77 cents per gallon; Georgia, 32 cents; Virginia, 26 cents; and Tennessee, 14 cents.

(Georgia has an additional 53-cent local tax; Tennessee also levies a 17 percent wholesale tax.)

The median state beer tax for the 50 states and the District of Columbia is 18.8 cents per gallon, roughly what residents of Connecticut and Illinois pay. The average is 25.4 cents.

At a press conference today, Gov. Mike Easley proposed raising the state beer tax four cents a can, or from 53.177 cents per gallon to 95.719 cents per gallon.

That would make North Carolina's beer tax the second-highest state-levied tax in the country.

Think a proposed hike in the beer tax is too steep?

Gov. Mike Easley says you may have a drinking problem.

At a press conference this morning, Easley proposed increasing the tax on beer and wine 4 percent and a separate tax on liquor by 4 percent, Ben Niolet reports.

The money raised would be used to spend $68 million to enhance mental health services by expanding local crisis services and increasing staffing in state hospitals.

Easley noted that would be about 4 cents on a can of beer.

"My thought is, if four cents a can, if that causes somebody economic hardship, then they're probably drinking too much and going to be customers of mental health, substance abuse sooner or later anyway," he said.