The Raleigh roundup: Budget battle brewing
The North Carolina General Assembly continues to haggle over specific provisions in the proposed 2016-17 state budget as they race to present a compromise spending plan to GOP Gov. Pat McCrory before the long Independence Day holiday weekend.
While the Senate approved its $22.2 billion budget on June 3 by a 26-13 margin — a margin that included exactly zero Democrats — the House rejected it unanimously on June 8.
The House passed its spending plan on May 19 by a 103-12 margin.
Now both chambers will have to work together to sort out areas of consensus and eliminate areas of contention. Those areas of contention can be found in a 255-page long document called the “House/Senate Comparison Report.” Out of 617 line items in the report, the House and Senate disagree on 577 of them. Among the major disagreements:
Education: The House proposes $25 million for literacy programs designed to aid students in achieving third-grade reading goals, but also paradoxically proposes cutting funding to summer reading camps, while the Senate budget pushes for a “bonus program” that would reward teachers who preside over the greatest performance growth both statewide and within their own school districts.
For teachers, Gov. McCrory called for average pay to rise to $50,000 per year, which the House’s 3 percent increase nearly reaches. The Senate, however, has been vocal about its intentions to do even more by dispensing a raise of over 6 percent that would bring average salaries almost 10 percent higher than McCrory’s goal — but to pay for it, they’ve proposed cutting raises for state employees.
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In the University of North Carolina system, students at risk of dropping out of school before they complete their undergrad degrees could see aid of up to $3 million if the House has its way. The Senate, on the other hand, seeks to reduce tuition to just $500 per semester at UNC’s Pembroke campus as well as Western Carolina University, while also proposing $3 million for a UNC Medical School in Asheville.
State Employees: The Senate proposes no raises for the majority of state employees, but the House calls for a 2 percent raise, as well as a $500 bonus. The House also wants a 1.6 percent cost-of-living raise for retirees, but the Senate proposes no such measure, leaving retirees thirsty for a COLA.
Taxes: While the House’s proposal seeks to raise the amount of untaxable income — again — the Senate wants this provision phased in over two years, as opposed to the House’s four. For taxpayers filing as single, this exemption went from $3,000 in 2013 to $7,500 in 2014, and the current proposal will probably add another $1,000 to that. For married couples filing jointly, those amounts were $6,000 and $15,000, respectively, with another $2,000 possible.
Rep. Joe Sam Queen, D-Waynesville, whose district includes parts of Haywood County and all of Jackson and Swain counties, says he’s heard that the legislature is now “mostly all together” on hammering out compromises, with compensation for teachers and state employees being the remaining stumbling blocks.
Queen thinks the competing budget proposals “aren’t as bad as in the past three or four years,” but he stresses that since this is an election year, Republicans are making hollow gestures to significant constituency groups, like teachers and state employees.
“These ‘raises’ are simply restoring cuts from the George W. Bush recession eight years ago, and only half that,” Queen said. “And with inflation and the cost of living, they’re just barely getting their noses above water from where they were eight years ago. [McCrory’s budget requests] are completely without vision or imagination. We’re falling behind.”
Queen did, however, have two pieces of advice for North Carolina taxpayers.
“Stay tuned, and remember in November.”
Despite the disagreements on these major quality-of-life issues, the General Assembly did manage to agree on 40 items in the report. Among the areas of accord are $5 million in additional funding for the Clean Water Management Trust Fund, a $3.7 million increase in the state’s contribution to the Firefighters’ and Rescue Squad Workers’ Pension Fund, $1.8 million in raises for State Highway Patrol Troopers, a $1.4 million increase in the state’s contribution to the National Guard Pension Fund, and $250,000 to digitize mental health records used in gun purchases.
