State budget moves forward
Published 8:27 am Thursday, September 17, 2015
RALEIGH – It’s 75-plus days late, but it appears a compromise has been reached between members of the North Carolina House of Representatives and Senate on a new operating budget.
On Tuesday, the Senate tentatively passed a $21.735 billion budget package that the Republican leadership says includes a responsible 3.1 percent spending increase, cuts taxes, invests hundreds of millions of additional dollars in public education and other core priorities and shores up the state’s rainy day and repair and renovation funds by $600 million.
The House vote on the budget is expected today (Thursday). If it passes there, as expected, it will come just in time to avoid a third temporary spending measure, put in place since July 1, for operating state government. The current temporary measure is set to expire on Friday.
“There are some good things in this new budget, but in the same breath there’s some things we in the House compromised in order to move this long overdue process to a completion,” said Howard Hunter III of Ahoskie who represents the 5th District (Hertford, Bertie, Gates and a portion of Pasquotank) in the House.
Hunter said with a $400 million budget surplus that was announced back in May, money was available to fully fund some portions of the new budget.
“I’m not proposing to go overboard and spend, spend, spend that surplus, but we could have used some of it to give all state employees an across the board two percent raise,” Hunter said. “I fought for that pay increase, but the Senate had its way and we had to compromise for a one-time $750 bonus for our state workers.
“That’s a slap in their face,” Hunter added. “Our state workers have not had a significant raise in a long while and all are facing increases in cost of living. Those increases will swallow up that one-time $750 bonus.”
Hunter also waged a battle in the House to keep the school-based Driver’s Education program funded as well as ensuring that Teacher Assistants jobs were saved.
“We got both in the new budget, but both have stipulations,” Hunter explained. “Driver’s Ed is fully funded statewide at $24.1 million for 2015-16, but that’s a non-recurring cost as after this year the money used to fund that program will come from other sources. As far as the money for Teacher Assistants, it’s at $138.1 million, the same as the last budget year. But it comes with a catch as local school districts cannot use that pot of money to fund other positions, to include hiring regular teachers.”
Later on Wednesday, after a round of budget workshops conducted by the House, Hunter, who initially said he would vote in favor of the budget, was having second thoughts.
“I support what we’re doing by increasing the starting salaries for new teachers in order to attract them to work in our state, but I can’t turn my back on the ones who have taught for 30 years and they’re not getting anything. We need to pay them. The Republicans are saying let’s wait ‘til next year to give the veteran teachers a raise; I say there’s no time like the present.”
Another part of the budget that was disheartening to Hunter was the state incentives paid to attract renewable energy companies to North Carolina will end Dec. 31.
“I fought to keep those incentives because they have led to millions worth of investments made by solar energy companies in my district alone,” Hunter noted. “I guess the majority of House and Senate members believe that fossil fuel is the answer to everything.”
Solar power companies investing in North Carolina projects have been able to qualify for a 35 percent tax credit that is taken over five years. Companies that have a project that is 80 percent complete by the end of the year will still be able to take advantage of the credit, said Betsy McCorkle, the North Carolina Sustainable Energy Association’s director for government affairs. McCorkle said renewable energy has led to $4.7 billion in net positive economic impact and added that the tax credit is a proven driver of economic development in rural counties.
Meanwhile, the budget, upon adoption, will provide a boost to small, rural counties under a new formula devised to distribute state sales tax. That is an $85 million deal statewide. Bertie, Northampton and Gates will see increases in excess of 30 percent. HertfordCounty will gain eight percent.
The new budget also sets aside $225 million over two years for the expected Medicaid overhaul legislation and $600 million for fiscal emergencies and building repairs, according to the legislative leaders.
Additional key provisions of the budget compromise include:
Allocates funds for a 3 percent market-based salary increase for all sworn members of the State Highway Patrol and raises starting salaries from $35,000 to $36,050 per year.
Invests more than $38 million over two years to boost salaries for correctional officers.
Increases funding for public education by more than $530 million in the first year alone.
Reduces class size in first grade to a 1:16 teacher-student ratio in the second year – a step research has repeatedly shown is key to academic success.
Enhances textbook and digital learning resources funding and expands the Read to Achieve summer reading camps in to first and second grades.
Allocates funding to the School Connectivity Initiative to bring better broadband and WiFi access to all North Carolina schools.
Cuts the personal income tax rate to 5.499 percent beginning in 2017 and increases the zero percent tax bracket in 2016 – ensuring taxpayers married filing jointly pay no state personal income tax on their first $15,500 of income.
“There’s no question this year’s budget process was long and difficult, but it was important to get the final product right,” said Senate Leader Phil Berger (R-Rockingham.) “This budget benefits all North Carolinians by providing families and small businesses hundreds of millions of dollars in tax relief, and by making a generous investment in public education, transportation and other core priorities.”