Republican candidate for lieutenant governor Robert Pittenger criticizes Democrat Walter Dalton over state spending.

U.S. Sen. Elizabeth Dole voted for two other minimum wage increases.

In February of 2007, the Senate voted on a House bill which would have increased the minimum wage from $5.15 to $7.25 over two years. The hike was coupled with small business tax cuts opposed by some Democrats, who preferred a clean vote.

That bill passed 94-3, with Dole voting for it. It was never signed into law, however.

In May of that same year, the minimum wage increase was included in an emergency supplemental appropriations bill that included almost $100 billion in spending for the wars in Iraq and Afghanistan. That time, some Republicans complained that it was paired with war funding.

The first hike in a decade, it raised the minimum wage to $7.25 an hour in three stages over the following two years.

The approprations bill passed 80-14, with Dole voting for it. 

Sarah Palin challenged North Carolina voters Thursday to choose Republican Sen. John McCain's promise to balance the federal budget in four years, bring tax relief to every American and drill for offshore oil.

Before an energetic crowd that nearly filled an Elon University baseball field, the vice-presidential candidate on McCain's ticket urged voters to reject what she described as Democratic Sen. Barack Obama's plan to redistribute wealth and raise taxes, Josh Shaffer reports.

"It's the choice between a politician who puts his faith in government," Palin said, "and a true leader who puts his faith in you."

Thousands packed the sun-blazed field in support of Palin, including five students who painted her name on their bare chests, along with a sixth who painted an exclamation point.

The Palin trumpeted McCain's performance in Wednesday night's presidential debate, saying her running-mate will reform the waste that led to the nation's financial crisis.

"John McCain is going to Washington to work for Joe the Plumber," said Palin, referring to the everyman voter who unintentionally became the star of Wednesday's debate.

Palin drew cheers, but the loudest reception came for country music legend Hank Williams Jr., who performed a song he wrote for the campaign to the tune of his hit "Family Tradition."

He wore a Carolina Panthers jersey with his nickname "Bocephus" stenciled on the back. 

A mailer targets Democratic Senate candidate Kay Hagan on taxes.

The Associated Builders and Contractors sent the mailer to North Carolina voters this week. It claims that North Carolina has "the highest tax burden in the Southeast."

"No wonder times have been so tough lately," it says. "And guess who has been in charge of North Carolina's money for the last five years?"

The article notes that the state budget has increased by more than $3 billion during the time that Hagan was a cochairwoman of the Senate Appropriations committee.

The Washington-based group has made two automated calls targeting Hagan over earmarks and the state budget and praising U.S. Sen. Elizabeth Dole on offshore drilling and sent a mailer criticizing Hagan over earmarks.

A lobbying group for construction contractors, it is concerned about Hagan's support for a bill that would make it easier to unionize.

A robocall attacks Kay Hagan on state spending.

The Associated Builders and Contractors' Free Enterprise Alliance is making the automated calls to North Carolina voters arguing that the Democratic Senate candidate included costly projects in the state budget.

"In the state Senate, Hagan set out securing earmarks, state funding for theater programs," a woman says in the calls. "Her pet projects cost us hundreds of thousands of dollars."

The call makes a link between state spending and earmark reform, an issue being pushed nationally.

As a budget writer from 2003 to 2007, Hagan was known for bringing home the bacon: $1.5 million for an International Civil Rights Museum, $500,000 for Greensboro's Center City Park, $500,000 for the International Furnishings Market in High Point, and $10 million for a joint Millennium campus being developed by the UNC-Greensboro and N.C. A&T State University.

Technically, state legislators do not refer to their spending projects as "earmarks," although the concept is the same.

After the jump, the script.

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An ad by the Alliance for North Carolina attacks Republican gubernatorial candidate Pat McCrory over his record as Charlotte mayor.

What the ad says: The ad begins with a postcard image of Charlotte with the words "Welcome to Charlotte! ... not the safest place." Narrator: "Charlotte, North Carolina. A higher crime rate than New York and L.A. That didn't stop Charlotte Mayor Pat McCrory from taking a pay raise for himself, but vetoing a pay raise for police and firefighters, even as crime increased. And the Charlotte Observer said 'McCrory failed to address deep-seated problems by not adequately funding police and fire resources.' Mayor McCrory, stop supporting pay raises for politicians like yourself, and start supporting police and firefighters."

The background: The ad makes several claims about crime and the city budget.

POLICE AND FIREFIGHTERS: In 2006, the Democratic majority on the Charlotte City Council passed a budget that included the first tax increase in 10 years.

The budget included a three percent raise for city workers, plus an additional five percent for certain police officers and firefighters.

McCrory vetoed the budget, saying among other things that the tax increase was unnecessary.

According to city council minutes from that year, he also said he had a "respectful disagreement" over giving one group of city employees higher raises than others.

"We saw fire uniforms, we saw sanitation uniforms, we saw police uniforms in here, yet we took one select group of good people and said you are going to get more across the board," he said, according to the minutes.

In 2007, the Charlotte Observer editorial board wrote that McCrory had not "adequately" funded police and fire resources in an editorial endorsing him for re-election.

CRIME RATE: Every year, police agencies around the country submit statistics on reported crime to the Federal Bureau of Investigation.

Based on the numbers for murder, rape, burglary, robber, aggravated assault and motor vehicle theft, CQ Press publishes an annual list of crime rankings for cities with more than 75,000 people.

In 2007, CQ Press ranked Charlotte the 50th least safe out of 378 cities — the worst score for a North Carolina city. Los Angeles was 135th least safe; New York City, 237th.

However, the FBI says on its Web site that these kinds of rankings are "simplistic" and "incomplete," since they do not take into account other variables, such as demographics and its geography, that could affect crime in a given area.

Overall, the FBI statistics show that the crime rate has gone down in Charlotte since McCrory took office in 1995, although there was an uptick from 2005 to 2006 — the year McCrory vetoed the budget.

PAY RAISES: As mayor of Charlotte since 1996, McCrory's salary and expenses have risen from $24,800 to $39,900. That's about a 60-percent increase.

Adjusted for inflation, however, it's more like a 20 percent raise.

The Charlotte mayor does not typically vote on the city budget, which includes pay raises, but he can veto it. If he does, it takes seven out of 11 votes from the City Council to override his veto.

In 1998, McCrory broke a tie, voting with the City Council's Republicans to overturn a pay raise for city leaders that would have boosted his own salary by several thousand dollars.

This year, the City Council narrowly approved a pay raise for members and the mayor in a vote that McCrory did not join. McCrory did not make any public statements on the raise and did not veto the budget, but his campaign staff said later that he opposed it.

Is it accurate? The ad is technically accurate, but overall it paints a misleading picture. While the crime rate increased in 2006, it has been down overall during McCrory's tenure. The pay raises for the mayor were in a different year than the pay raises for firefighters. And there are reasons to be skeptical of the comparison between Charlotte and New York and L.A.

— Ryan Teague Beckwith

Pat McCrory vetoed the proposed 2006 Charlotte budget.

The veto has been cited in a recent ad by the Alliance for North Carolina, which said that he vetoed "a pay raise for police and firefighters."

In 2006, the Charlotte City Council split along party lines on the budget. Republicans proposed a budget without a tax hike; Democrats proposed the first property tax increase in 10 years. After voting down the GOP proposal, the Democratic majority passed its version.

The Democrats' budget included a three percent pay raise for city workers, plus an additional five percent for certain police officers and firefighters.

McCrory vetoed it, saying among other things that the tax increase was not necessary.

According to city council minutes from June 19 of that year, he also said he had a "respectful disagreement" over giving one group of city employees higher raises than others.

"We saw fire uniforms, we saw sanitation uniforms, we saw police uniforms in here, yet we took one select group of good people and said you are going to get more across the board," he said, according to the minutes.

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State agency heads are being told to cut their budgets by two percent in the current fiscal year as the economic downturn takes its toll on revenues.

A memo from State Budget Director Charles Perusse to state agency heads last week says that "allotments ... will be reduced by two percent of each agency's authorized budget," Ben Niolet and Dan Kane report.

"We are not immune from the nation's economic slowdown and are implementing measures now to give us as much time possible to manage a revenue shortfall should it arise," Perusse wrote.

Kennon Briggs, the executive vice president and chief of staff for the N.C. Community College system, said Perusse met with community college officials last week and told them there would be an across the board cut of two percent, with the possible exception of public schools.

A two percent cut amounts to roughly $400 million from a $21.4 billion state budget lawmakers passed in July. The colleges were told in a system memo released Friday to comply with the cuts by Oct. 17.

A copy of the memo also said that agencies are being asked to hold back an additional one percent of their budgets in case further cuts "are required later this year."

The National Republican Senatorial Committee has released a new TV ad attacking Democratic Senate candidate Kay Hagan's record on taxes.

What the ad says: A narrator with a British accent reads a Dr. Seuss-ish rhyme as cartoons of Hagan are shown. "One tax, two tax, three tax, four. Vote for Kay Hagan if you want to pay more. Ten years in office and she's raised tax high. Income tax, sales tax, Coke tax ... Oh my. Doubling state debt? Hagan's foot on the pedal. Taxing working families? She gets a gold medal. The National Republican Senatorial Committee is responsible for the content of this ad. High taxes and spending. Hagan's record's real sad."

The background: The ad makes several claims about taxes and debt.

INCOME AND SALES TAXES: Facing a budget shortfall in 2001, the legislature increased the state sales tax by a half penny and the income tax on households making more than $200,000 a year by a half percent.

The taxes were billed as temporary fixes and were set to expire in two years.

In 2003, Hagan became a cochairwoman of the Senate Appropriations committee, which helps write the annual budget. That year, the legislature extended the temporary taxes two more years.

The taxes were extended again in 2005, but in 2006 the legislature phased out half of each tax increase. In 2007, the legislature phased out the remainder of the income tax hike and made the quarter-cent sales tax increase permanent.

Hagan voted for the temporary taxes, both extensions, the phase outs and the move to make half of the sales tax hike permanent. As a budget writer in 2005 and 2007, she pushed to reduce or end the temporary taxes, but she supported the final versions of the budget, which did not.

COKE TAX: In the late 1990s, a multi-state effort was started to make the sales tax more uniform in the hopes of getting online and catalog retailers to charge it.

At the time, North Carolina treated candy and soda differently based on where they were sold.

If you bought a bag of M&Ms at the 7-Eleven to eat immediately, you paid state and local sales tax since it was basically considered junk food. If you bought a larger bag to portion out in your kid's lunchbox, you only paid a local sales tax, since it was considered a grocery item.

To streamline the tax, legislators had to choose whether to charge the state sales tax on all candy and soda, or leave it all at the local rate.

The final 2003 budget included a higher tax rate on soda. At the request of the soft drink industry, it also included a separate provision that dropped the tax rate by half on cans and bottles sold through vending machines.

The streamlined sales tax, which included soda, prepared food and modified software, was estimated to bring in an extra $44.1 million in revenue, while the vending machine loophole was projected to cost the state $4.1 million.

STATE DEBT: The state constitution requires the legislature to balance the budget, so North Carolina's debt does not come from annual budget deficits.

Instead, the debt comes from bonds issued by the state to pave highways, build jails and college buildings and pay for other projects. The bonds are backed by the state's expected tax revenue.

During the five years Hagan was a budget writer, the state's overall debt went from $3.5 billion to $6.9 billion — nearly doubling.

However, the increased debt has not hurt North Carolina's credit rating. The three agencies that rate government bonds — Moody's, Fitch and Standard & Poor's — each give it a top-tier ranking.

North Carolina is one of only seven states to have top rankings from all three.

Is it accurate? Yes. Hagan voted for the temporary taxes, although she also voted to end or reduce them. She voted to raise the tax rate on soft drinks and cut a separate tax slightly. State debt doubled when she was a budget writer.

Kay Hagan voted on the temporary taxes several times.

The Democratic Senate candidate has been attacked in two recent ads for her support of two tax increases pushed by Gov. Mike Easley in 2001 and not ended until 2007.

Here is a quick summary of the votes she cast:

2001: To increase sales tax by a half cent and income tax on households making more than $200,000 by a half of a percent for two years. Hagan voted yes.

2003: To extend the temporary taxes until 2005. Hagan voted yes.

2005: To extend the temporary taxes until 2007. Hagan voted yes.

2006: To phase out half of the temporary taxes. Hagan voted yes.

2007: To phase out the remainder of the income tax hike and make the quarter-cent sales tax increase permanent. Hagan voted yes.

Hagan was a cochairwoman of the Senate Appropriations committee from 2003 to 2007.

As noted previously, she unsuccessfully tried to end the taxes entirely as a Senate budget writer in 2007, though she ended up voting for the final budget.