Senate Budget Plan Cuts Taxes, Boosts State Savings, Increases Teacher Pay | Eastern North Carolina Now

    Publisher's note: The author of this post is Rick Henderson, who is editor-in-chief for the Carolina Journal, John Hood Publisher.

Proposal would increase spending by 2.5 percent, $600 million less than governor's plan

    RALEIGH - Two numbers not mentioned during Tuesday's press conference rolling out the Senate budget for the next two fiscal years may be the most important: 30 and 72.

    Sure, the $22.9 billion in General Fund spending, the $1 billion in tax cuts, and the $363 million added to the state's rainy day fund would affect every North Carolina resident.

    But Senate leader Phil Berger, R-Rockingham, and his legislative colleagues have to focus on 30 and 72 - the minimum number of senators and House members, respectively, who will have to vote for whatever budget survives both legislative bodies in case Gov. Roy Cooper vetoes the package.

    In a statement Tuesday evening, Cooper was coy about his intentions. "It's good that some of the governor's proposals on teacher pay and other issues are reflected in the Senate budget, but we will reserve judgment until we see the details," said spokesman Ford Porter.

    To be sure, the budget not only must pass the Senate, but also be enacted by the House, where changes are inevitable.

    But leaders of both legislative bodies say they've been working more closely this year than in the recent past, and House Rules Committee Chairman David Lewis, R-Harnett, suggested Cooper may get the final spending plan by June 15, weeks earlier than usual.

    The GOP caucus in both bodies will have to remain solid to overcome Cooper's veto, if he uses it. There are 74 Republicans in the House and 35 in the Senate.


Senate leader Phil Berger, R-Rockingham, introduced the Senate's $22.9 billion General Fund budget Tuesday at the legislative complex. (CJ photo by Don Carrington)

    The Senate plan would spend $600 million less than the budget Cooper offered. It would set aside $150 million into a Medicaid reserve - Cooper wants to expand Medicaid coverage. And it would increase average teacher pay by 9.5 percent over the next two years, while the governor would boost it by that amount each year.

    All said, Cooper's plan would increase state spending by 5.1 percent over the budget year that starts June 1, compared to the 2.5 percent increase in the Senate budget.

    The full budget document is expected to be released around midnight Wednesday. (UPDATE: Table of Contents here. Full budget legislation here.)

    But a news release issued after the press conference offered several other highlights:

• It incorporates the Senate-enacted $1 billion tax cut in the budget. The plan would cut individual rates from 5.499 percent to 5.35 percent and corporate rates from 3 percent to 2.75 percent next year and 2.5 percent the following year.
• "Highly qualified" new teachers would receive higher starting salaries if they took jobs in low-performing schools or taught special education, science, technology, engineering, or mathematics. This continues a shift the GOP-led General Assembly began toward offering more pay to teachers who take on greater challenges. Berger also said the teacher-pay plan would move the state closer to a goal of boosting salaries for early-career teachers so that they would reach their maximum compensation by their 15th year in the classroom.
• It raises spending in the Strategic Transportation Investment Program - a system that funds infrastructure projects based merit rather than politics - by $320 million and spends nearly $450 million to repair structurally deficient bridges and resurface worn-out highways.
• It boosts the rainy day fund to $1.838 billion, or 8.2 percent of last year's budget, a record level of state savings.
• It sets a target of Dec. 1, 2020 to "raise the age" for juveniles charged with misdemeanors who are now tried as adults in the criminal-justice system. The budget establishes an advisory committee to put in place a system to remove 16- and 17-year-old minor offenders from the adult corrections system and instead try them as juveniles.

    There are a few economic incentive provisions in the budget that drew criticism from conservatives. Subsidies for film productions total $30 million in the Senate budget, with $15 million of that spending made permanent. (Previously, the spending had to be renewed annually.)

    And while there appears to be no money set aside for what the budget called "a new economic development fund to help attract major manufacturing projects ... to the state," John Locke Foundation Senior Vice President Becki Gray issued a note of caution.

    "Projects of this type can easily evolve into direct subsidies to politically favored companies," Gray said.

    The budget will be introduced in committees Wednesday, and it's expected to pass the Senate by Friday.