N Carolina budget deal: Income taxes cut, sales tax expanded

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RALEIGH, N.C. (AP) — The agreement lawmakers have reached on North Carolina's budget will reduce income taxes but also expand sales taxes to cover car repairs and appliance installations.

Senate leader Phil Berger and House Speaker Tim Moore on Monday unveiled details of the two-year budget deal that had been due before July 1.

$21 billion budget will keep all teach assistants in their classrooms fully paid for the next two years. Students can get back behind the wheel for driver education.

An additional $705 million will be going to maintain roads and bridges.

Individual income tax rates would fall slightly and a repealed deduction on medical expenses would be restored completely.

Local government shares of the new sales tax revenue will be distributed so small and rural counties get more. The change is considered a compromise for a previously proposed Senate sales tax plan that would have left many urban areas getting less.

Gov. Pat McCrory said over the weekend he isn't happy with the sales tax change, calling it a tax increase.

View the full budget compromise bill here.