State Republican Party chairman Tom Fetzer said there's no such thing as a temporary tax increase in North Carolina.

Fetzer called reporters to a Thursday morning news conference to say that tax increases have a way of living on past their sunsets. He said Gov. Beverly Perdue's promise that she won't let her proposed 1-cent sales tax increase live past its expiration day is an empty one.

In 2001, the legislature enacted a 1/2 cent sales tax increase that was set to expire in two years. A quarter cent of that increase became permanent.

Perdue was lieutenant governor when those decisions were made.

"This governor has no credibility on the issue of a sales tax increase," Fetzer said.

The lieutenant governor's position has little power. The office-holder presides over the Senate, but can only vote in the case of a tie.

Fetzer said she could have steered debate. Fetzer, like Republicans in the legislature, are calling for deeper budget cuts.

"We can't raise taxes on the people of North Carolina right now," Fetzer said. "Any time you raise taxes, you get bad consequences."

Democrats have said tax increases are the only way to spare vital programs and services from devastating and irreparable cuts.

House Speaker Joe Hackney said expiration dates on new taxes proposed by Gov. Beverly Perdue could help thaw frozen budget negotiations.

"I can't speak from the other side. I think there are some suggestions she made that would help us move off center," Hackney said. "I do think it's important that she is engaged in this process becuse we're polarized here."

Hackney said it was his understanding at a meeting with with Perdue at the Executive Mansion that Perdue was presenting a menu of tax options, not an all-or-none package.

Hackney said finance negotiators were resuming talks Tuesday.

Speaking to reporters, Gov. Beverly Perdue called for the legislature to complete its budget negotiations and raise about $1.6 billion in taxes.

Perdue said the plan she submitted this morning, designed to protect health care, public safety and education, was the only option.

"This is the only pathway I know that protects the core services and public education in North Carolina," she said.

Perdue's proposal incorporates aspects of both legislative proposals, including taxing alcohol and cigarettes, expanding sales tax to services and an additional income tax bracket.

When asked how North Carolinians could be sure that temporary tax increases would not become permanent, Perdue's answer was simple.

"Because I'm the governor," she said.

Update: Perdue aides said she characterized the plan, not as exclusive, but as the only detailed option proposed so far. 

Gov. Beverly Perdue told legislative leaders Tuesday she wants a 1-cent sales tax increase and a total tax hike package of $1.6 billion to balance the budget.

Perdue, a Democrat, met with lawmakers at the Executive Mansion and gave them a list of tax and other revenue options that she would like to see passed. It was an effort to help break the impasse between Democratic Senate and House leaders over what taxes to increase and how much.

Highlights of Perdue's wishlist, provided to Dome, include: an "emergency" 1-cent increase in the sales tax that would expire in October 2010, an emergency income tax surcharge on single taxpayers who earn more than $500,000 and married couples filing jointly making more than $1 million.

Perdue wants a 50-cent-per-pack increase in cigarette taxes, down from the $1-per-pack she requested in March, plus 2-cents-per-can more on beer and a 2 percent increase on alcohol.

The list included several tax increases that would take effect in the fall of next year, including taxes on some services (warranties, installations, repairs) and a tax increase on "luxury services" such as cosmetic surgery, limousines and chartered flights.

Update: Perdue released her letter and tax proposal.

Republican legislative leaders want a public debate, five of them actually, with Democrats on the state budget over the next two weeks.

"Any place, any time," said Senate Republican Leader Phil Berger, of Eden.

Berger and House Republican Leader Paul Stam criticized Democratic budget writers because their intraparty disagreement is not over whether to raise taxes but how to raise them. House and Senate budget conferees, all Democrats, continue to meet this week to work out a plan for raising taxes by around $1 billion next year.

The state's budget expired June 30 but is currently operating under temporary spending legislation that allows agencies to spend at a level of 85 percent of last year's $21.4 billion budget. Republican leaders are content with that spending level and don't mind if two weeks of debate stretches the temporary spending authority further into the fiscal year.

Lewis, a Dunn Republican has launched a petition drive and an ad raliing against what he calls the "billion dollar lie."

Democrats describe the budget deficit as $4 billion or more. Republicans say that figure is intentionally misleading.

Revenue next year is expected to be more than $4 billion behind what it would have taken to keep funding programs and services at recent levels. Even measuring against this year's spending, which has been cut from what was approved in this year's budget, revenues are nearly $3 billion behind. Those figures do not account for approximately $1.3 billion in federal stimulus money, as the state historically has not calculated federal money in totaling up the general fund budget.

More after the jump.

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House Speaker Joe Hackney isn't too worried about Amazon.com's objections to a proposal that would have required the company to collect sales tax within the state.

Mark Binker, Dome's colleague at the Greensboro News & Record, reports that Hackney is not paying attention to Amazon's decision to end within the state a program that paid Web site owners for referring customers to Amazon.com products.

"Amazon has a history of acting that way. I think they did that in New York and then they backed off and reversed themselves so I’m not sure we should take that too seriously. I have my own way of dealing with it, which is I just won’t deal with Amazon," Hackney told Binker.

Presumably, Hackney will not be purchasing a Kindle soon.

The decade-long effort to overhaul North Carolina's tax system finally has some legs this year, but will they weaken if a budget stalemate drags on?

Taxes are the central debate that delayed passage of the state's $18 billion-plus budget before the new fiscal year began. House and Senate Democrats are at odds over how many additional services should be covered by the sales tax, and whether rates should go up.

"We're back to philosophical differences," said Sen. David Hoyle, a Gastonia Democrat, one of the chief tax negotiators, after a week of closed-door bargaining found little common ground.

It's unclear whether those legs have enough muscle to withstand complaints from interest groups whose customers would be singled out to pay more taxes.

Republicans won't go along with any plan because they say raising taxes is the wrong message from Democrats, who seek $1 billion more this year to help narrow a wide budget gap. (AP)