Senate Budget Plan Includes Major Tax Cut, Spending Growth Rate Half of Cooper's Plan | Eastern North Carolina Now

    Publisher's note: This post, by Brian Balfour, was originally published in the Fiscal Policy section of Civitas's online edition.

    The North Carolina Senate's budget plan would increase state spending at half the rate proposed by Gov. Roy Cooper and include a tax cut package projected to save taxpayers $1 billion over its first two years of implementation.

    Total General Fund spending for the coming fiscal year would reach $22.9 billion under the Senate's proposal, compared to Gov. Cooper's $23.5 billion budget plan released in early March. The Senate plan would mark an increase of 2.5 percent over the current year's budget, compared to Cooper's budget that would grow spending by 5.1 percent. The Senate's more restrained growth rate would result in roughly $600 million less in state General Fund spending.

    Headlining the budget proposal are major tax cuts, teacher pay raises, more rainy day savings, and - unfortunately - more corporate welfare.

    Following is a list of highlights from the Senate budget proposal (and a closer look at education spending can be found here):

  • "Billion Dollar Tax Cut": budget includes the Senate's tax cut plan projected to save taxpayers a billion dollars in its first two years of implementation. It is projected that under this cut, 99 percent of taxpayers will be either paying less or no personal state income taxes. The tax cut plan includes the following:
    • Reduction in the personal income tax rate from 5.499 percent to 5.35
    • Increase of the standard deduction for married filers from $17,500 to $20,000 and single filers from $8,750 to $10,000
    • Lowering of the corporate income tax rate from 3 percent to 2.75 percent in 2018 and to 2.5 percent in 2019
    • Simplification and reduction of the franchise tax on businesses, creating a new flat $200 tax on the first $1 million of a business's net worth

  • Teacher Pay: provides an average 3.7 percent pay raise for NC teachers in the coming fiscal year, and a total 9.5 pay raise over the biennium
  • Increases state funding for K-12 education by $600 million over two years
  • Education Savings Account: appropriates $450,000 in the first year to help establish an ESA program for special needs students, with $1 million allocated in the second year to go towards eligible students
  • Adds $363 million to the state's rainy day fund, which would bring the fund's balance to more than $1.8 billion - the highest in the state's history. By comparison, Gov. Cooper's spending package set aside just over $300 million into the savings reserve
  • Provides $150 million in disaster relief assistance for continued Hurricane Matthew support. This will help replenish the $201 million already spent from the Disaster Recovery fund this year. Cooper's budget plan allotted $100 million for disaster relief
  • Includes a $750 or 1.5 percent salary increase for most state employees - whichever is greater
  • State Pension contributions: taxpayer contributions for the state employee pension fund will increase next year to $1.7 billion
  • Increases funding to the NC Pre-K program (formerly More at Four) by $18 million over two years to add another 2,350 slots
  • Appropriates $75 million in grant money to rural counties to assist with public school building expenses
  • Agrees with Cooper's budget in granting more handouts to Hollywood. The Senate budget makes a permanent expenditure of $15 million annually to the film grant program, the same amount Cooper included in his budget for the coming fiscal year
  • Creates yet another corporate welfare program, called the "Site and Building Development Fund." This fund would offer interest-free and very low interest loans to local governments for the development of "qualified business facilities." The Senate budget appropriates $2.5 million to the fund in the coming fiscal year
  • $727 million in debt service payments
  • And lastly, many pork and highly questionable budget items remain, including:
    • Roughly $30 million for museums, $10 million for "historic" sites (including Tryon Palace), $7 million for the Arts Council, $2.4 million for the Symphony, and $40 million for the state zoo and aquariums.
    • $400,000 in additional funding for a "strategic plan" and operating support for the Global Transpark money pit, bringing total appropriation to $1.15 million
    • $2.8 million for "downtown revitalization" and another $1 million for "Main St. Solutions"
    • $1.8 million to the High Point Market Authority (a $200,000 increase)
    • $750,000 increase in "marketing funds" for NC products
    • $3 million increase in "advertising" funds for tourism and international advertising
    • $112,000 for something called the "Outdoor Heritage Advisory Council Director"

Go Back

Leave a Guest Comment

Your Name or Alias
Your Email Address ( your email address will not be published)
Enter Your Comment ( no code or urls allowed, text only please )

Court Ruling in the McAdams Case: A Body Blow to Free Speech and Tenure Civitas Institute, Editorials, Op-Ed & Politics NC Improves in Teacher Pay Rankings


Latest Op-Ed & Politics

BCS also need someone proficient in data analysis. Clearly they do not have such now.
Iranian-backed Houthi terrorists from Yemen reportedly seized a cargo ship in the Red Sea on Sunday, which comes after the terrorist group had recently threatened to target Israeli-flagged vessels in the area.
Newly sworn-in California Senator Laphonza Butler expressed excitement about her new job, citing the short commute to work from her home state of Maryland.
Economist and bestselling author Dr. Thomas Sowell said that relying on the government to enforce so-called “social justice” would only lead to a loss of freedom in an interview with Daily Wire Editor Emeritus Ben Shapiro.
New Program Partners with CVS Caremark, GoodRx, to Target Some High-Cost Prescriptions, Lowering Out-of-Pocket Costs for Members
Missouri Republican Attorney General Andrew Bailey said Sunday that he was looking into accusations that leftist outlet Media Matters for America intentionally misled readers about X to pressure advertisers to pull support from the social media platform.
The state Supreme Court will not bypass an intermediate court's consideration of two parents' lawsuit against a Charlotte private school. Doug and Nicole Turpin accuse Charlotte Latin of expelling their children to retaliate against criticism of changes in the school's focus.
Rep. Kevin McCathy (R-CA) praised his successor in the role of House speaker, Mike Johnson (R-LA), on Sunday for overseeing the long-awaited release of more January 6 footage to the public.
An emergency alert message was errantly sent to over 330 million phones today after President Biden accidentally hit the wrong button reaching for his Life Alert.


able bodied and not doing any jobs - Biden is bringing the same problem to US
NBC sketch-show “Saturday Night Live” delivered a series of comedic slaps to an increasingly gaffe-prone President Joe Biden, focusing on his recent conversation with Chinese President Xi Jinping in California.
Elon Musk‘s SpaceX made headway in the second test flight of its Starship rocket despite the demo on Saturday ending with explosions.
state law also allows state judges to order deportation of illegal aliens who enter thru Texas
North Carolinians were more generous in their giving to charities in the state this past year.
Comedian and HBO host Bill Maher told former Democratic National Committee chair Donna Brazile that he couldn’t see President Joe Biden winning a second term in the White House.
The scab covering the still-fresh wound of his removal from office was ripped back open today, as Kevin McCarthy's long-awaited "Speaker of the House" nameplate finally arrived from the engraver.


Back to Top