Enjoy your St. Patty's Day Guiness before alcohol tax increases to 5%

As North Carolina faces a $3.4 billion budget gap, Governor Bev Perdue released her $21 billion budget recommendations earlier today. For the most part, the recommendations seem pretty fair, considering the tough economic times we are facing now and in the year(s) ahead.

The proposed budget would cut over 1,000 jobs from state government (currently the state employs 95,166 people, including full/part-time, trainees and time-limited positions) and $360 million from overall state spending. The top three biggest cuts will be made to the Department of Corrections, the Department of Health and Human Services, and the University System. The proposed budget does include a 2.5% increase to K-12 schools, increasing overall spending for state education to $350 million over the next 2 years.

How will she pay for this spending? Well, for starters, she has proposed increasing the alcohol tax by 5% and the cigarrette tax to $1 a pack.

My social life is not excited to hear about the tax increase on alcohol, but, what can I say? It's not like I need alcohol to survive, and my friends who work for the University System need their jobs to eat (and drink with me), so I suppose I'd rather see the alcohol tax go up than cut my buddies' jobs. Plus, as former Governor Mike Easley put it, "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." Touche, Governor Easley, touche.

When it comes to the cigarette tax, I want to know why we're not spiking that one even higher? (that was a retorical question my friends, see: NC lobbyists). But as Under The Dome reported this week, NC ranks 45th out of the 50 states for the highest cigarette tax.

The Campaign for Tobacco-Free Kids research shows that only five states have lower cigarette taxes than us: Florida, Virginia, Mississippi, Missouri and South Carolina. NC currently has a $0.35 (that's 35 cents) per pack tax, which is far below the $1.15 per pack median rate in Arkansas and Delaware. Highest cigarette tax is in NY, at $2.75 per pack, and the lowest is SC (go figure), at $0.07 per pack.

The Governor's proposed increase would raise NC's rate to $1.35 as of April 1st, which would tie Pennsylvania for 20th highest rate. The federal cigarette tax will increase to $1.01 on April 31. In addition, a few cities and counties charge local cigarette taxes. The state cigarette tax has gone up only three times in the past 18 years. The last time Governor Easley tried to raise it to $0.55 a pack (2008-2009 budget), the legislature said hell no. Must point out though, that was an election year...

The increases in tobacco product taxes would raise $350 million in new revenue. I'm all for it, you guys are killing your lungs (and mine, while you're at it) with that crap anyway. I just wonder if the proposed state ban on smoking in public places will reduce the projected revenue by much?