Senate Passes Budget Including $1 Billion Middle Class Tax Cut, Teacher Raises, Hurricane Matthew Relief | Eastern North Carolina Now

Press Release:

    Raleigh, N.C.     The North Carolina Senate passed a $22.9 billion balanced budget Friday, May 12, 2017. Senator Bill Cook (R-District 1) voted in support of the Senate's version of the state budget, which cuts taxes, controls the growth of government spending, bolsters the state's savings, and dramatically increases teacher pay. Next it will go to the House of Representatives. Highlights on coastal/district include:

Revitalization and Economic Development Grants

• Appropriates $2.8 million to the Perquimans Marine Industrial Park, which is situated in Northeastern North Carolina along the Perquimans River. This 71-acre state owned park is part of the 400-acre Perquimans Commerce Center south of the historic Town of Hertford.
• Appropriates $100,000 to the Washington Harbor District Alliance of Beaufort County for the purpose of rehabilitating a historic downtown building to be used for a permanent farmers and artisans market in downtown Washington, N.C.
• Appropriates $200,000 to the Town of Bath of Beaufort County for a downtown revitalization project.

Tourism Advertising

• Designates an additional $3 million over the biennium to the Economic Development Partnership of North Carolina (EDPNC) for tourism advertising and marketing. These funds are restricted to a research-based comprehensive marketing program directed toward consumers in key markets most likely to travel to North Carolina and shall not be used for ancillary activities, such as statewide branding and business development marketing.

Hurricane Matthew Recovery Funding

• Provides an additional $150 million in disaster relief assistance to victims of Hurricane Matthew. Previously, the N.C. General Assembly enacted a $200 million disaster relief package into law during the December 2016 special session.

Oyster Sanctuaries

• Appropriates an additional $1 million on a recurring basis for oyster sanctuaries. The revised net appropriation for oyster sanctuaries is $2.8 million over the biennium.

Shellfish Rehabilitation

• Continues funding for cultch planting at the FY 2016-17 level and makes the funding recurring. The revised net appropriation for cultch planting is $1.1 million in FY 2017-18 and $1.2 million in FY 2018-19.

Oyster Study and Shellfish Mariculture Plan

• Provides $150,000 on a nonrecurring basis for the North Carolina Policy Collaboratory to study and advance efforts to ecologically restore and achieve economic stability of the shellfish industry and to develop a Shellfish Mariculture Plan.

Artificial Reefs Program Funding

• To enhance fishing opportunities, the Marine Resources Fund may be used to construct artificial reefs in the estuarine and ocean waters of the state and federal waters up to 20 nautical miles from land.

Crab Pot Cleanup

• Continues the Crab Pot Cleanup Program piloted in FY 2016-17. The North Carolina Coastal Federation shall use the funds of $100,000 to contract with commercial fishermen to aid in derelict crab pot cleanup efforts. The Coastal Federation is also encouraged to find ways to reuse recovered crab pots.

Marine Fisheries Commission Amendments

• Reduces the membership of the Marine Fisheries Commission from 9 commissioners to 7 and a supermajority of 5 to make decisions. Thus, the two at-large seats would be abolished and the composition of the MFC would be three commercial, three recreational and one scientists.
• Clarifies and defines the authority granted to the N.C. Marine Fisheries Commission (MFC) in the development of a temporary supplement to an existing Fishery Management Plan (FMP). In essence, the Commission would be required to follow the management strategies contained in the original FMP or subsequent amendments to the plan. Moreover, the Commission would be required to go through a stakeholder process that includes public hearings, economic analyses and the rulemaking process as defined by the Administrative Procedure Act (APA) in GS 150B - prior to enacting any changes to the FMP.

    "I believe these changes would go a long way toward removing politics from the decision-making process of the Marine Fisheries Commission, and actually identify projects on a transparent, data-driven process. Section 13.7.(c) would not prohibit the Commission from addressing a stock assessment - but it simply requires the Commission to go through a transparent, data-driven process - prior to enacting any changes to the FMP," Cook said.

Storm Damage Mitigation Fund

• Establishes the Coastal Storm Damage Mitigation Fund as a special revenue fund for particular beach nourishment or damage mitigation. Thus, revenue credited to the fund may only be used for costs associated with beach nourishment, artificial dunes, and other projects to mitigate or remediate coastal storm damage to our ocean beaches and dune systems.

Clean Water Management Trust Fund

• Provides an additional approximately $4.6 million over the biennium to the $17.2 million recurring budget of the Clean Water Management Trust Fund.
• Allocates $1 million through the Water Resources Development Projects for storm debris removal in Eastern North Carolina.

Deep/Shallow Draft Dredging

• Continues to appropriate approximately $23.2 million to the state's Shallow Draft Dredging Fund.
• Directs the Department of Environmental Quality to explore the feasibility and cost-effectiveness of the acquisition of a State hopper dredge.
• Instructs the N.C. Department of Transportation to study the use of its new dredge vessel, the Dredge Manteo, and a plan to allow use of the dredge vessel by other state departments and agencies.
• Authorizes the North Carolina State Ports Authority to utilize up to $12 million of their funds for dredging needs. Phosphate and sulfur products from PotashCorp located in Beaufort County represent 68 percent of total tonnage handled by the Port of Morehead City.

Graveyard of the Atlantic Museum

• Increases funds for the existing building and environmental services at the Graveyard of the Atlantic Museum located on Hatters Island.

Teacher Assistant Tuition Reimbursement Program

• Expands the teacher assistant tuition reimbursement program to Beaufort County. Last year, the General Assembly established a teacher assistant tuition reimbursement pilot program in five counties, which provides tuition reimbursement for TAs to pursue a college degree leading to teacher licensure.

Elizabeth City State University Stabilization Funds

• Appropriates an additional $5.8 million to Elizabeth City State University to stabilize enrollment. Funds will be used to hire temporary faculty to anchor core programs, provide start-up funds for an aviation science program, and support student success initiatives. The revised net appropriation for Elizabeth City State University is $32 million in FY 2017-18. Included in a different provision, also prohibits any potential reduction in state funds allocated to Elizabeth City State University.

East Carolina University: Medical School Sustainability Funds

• Provides an additional $4 million of recurring funds to stabilize the Brody School of Medicine at East Carolina University. The revised net appropriation for East Carolina University Health Affairs for all items is $74.4 million in FY 2017-18 and $75 million in FY 2018-19.

School Construction in Rural Counties

• Allocates $75 million for grants to economically struggling, rural counties to assist with critical public school building needs.

    Geographically Isolated Schools - Ocracoke Island

• Increases funding for geographically isolated schools. Thus, Ocracoke School will receive several additional classroom teaching positions under this proposal.

Rural Touring Arts Grant Program

• Creates the Rural Touring Arts Grant Program. This Program will provide grants to arts organizations that are designated as State Arts Resources so that these organizations can increase their reach in Tier 1 and Tier 2 counties. The revised net appropriation for Rural Touring Arts Grant Program grants is $125,000 in both years of the biennium. Additionally, the budget increases support for the Grassroots Arts Grant Program by $750,000. The revised net appropriation for the Grassroots Art Grant Program is $3.1 million in each year of the biennium.

Military and Veterans Healing Arts Grant Program

• Establishes the Military and Veterans Healing Arts Grant Program. This Program aims to increase access to the arts for North Carolina's service members, veterans, and military families through grants to local arts councils and arts organizations that will partner with military bases, VA hospitals, and veterans service providers. The revised net appropriation for Military and Veterans Healing Arts Grant Program grants is $125,000 in both years of the biennium.

Roanoke Island Historical Sites

• Requires the N.C. Department of Natural and Cultural Resources to negotiate a Memorandum of Agreement (MOA) with the Roanoke Island Historical Association (Lost Colony) to collaborate and strive for an acceptable correlation agreement between the Roanoke Island Festival Park and the Roanoke Island Historical Association.

Capital Improvement

• Authorizes $300,000 for capital improvements at the Outer Banks Education Center located in Corolla of Currituck County.
• Authorizes $900,000 for capital improvements at the Wildlife Resources Commission boating accesses.

Mattamuskeet Lodge

• Directs the N.C. Wildlife Resources Commission to use up to repair the roof and stabilize the tower at the Mattamuskeet Lodge in Hyde County.

    Dare County Bombing Range

   

• Allocates approximately $1.4 million to the Dare County Bombing Range or "Navy Dare" via the North Carolina Forest Service.

Rural Health Centers

• Allocates an additional $15 million over two years to community health centers, rural health centers, free clinics and other health services providers in rural and underserved areas that assist the uninsured.

N.C. Temporary Assistance for Needy Families

• Approves the plan titled "North Carolina Temporary Assistance for Needy Families State Plan (NCTANF) FY 2016-2019," prepared by the Department of Health and Human Services and presented to the General Assembly. The counties approved for the NCTANF state plan FY 2016-2019, are Beaufort, Caldwell, Catawba, Lenoir, Lincoln, Macon, and Wilson. TANF was created to help families in need. The TANF bureau works with families to help them become self-sufficient.

NCSU Innovation in Manufacturing Biopharmaceuticals

• Provides funds for North Carolina State University's (NCSU) participation in a collaborative effort to accelerate the development of innovative manufacturing processes for biopharmaceutical products. Funds will support the Biomanufacturing Training and Education Center at NCSU and serve as matching funds for a federal grant from the National Institute of Standards and Technology. The revised net appropriation for this initiative is $2 million in FY 2017-18 only.

    In Agriculture and Commerce:

• Provides $1 million in supplemental funding to offset potential costs from intervention in federal litigation over the Waters of the United States rule.
• Provides $2.3 million for firefighting equipment for the Forest Service.
• Provides $700,000 for the Tobacco Trust Fund and $1 million for the Agricultural Development and Farmland Preservation Trust Fund.
• Provides $750,000 for international marketing and food marketing.
• Provides $12.5 million for a new Site and Building Development Fund.
• Provides $3 million for the Lift Fan Facility project at Cherry Point Marine Corps Air Station.
• Provides $5.8 million for the Food Processing Innovation Center to be housed at the N.C. Research Campus. This will improve our state's competitiveness in recruiting agricultural manufacturing companies.

    In Taxes and Economic Development:

• Reduces the tax burden on North Carolina families and small businesses by cutting the personal income tax rate from 5.499 to 5.35 percent in 2018, and by increasing the amount of income that is exempt from state income tax.
• Lowers the corporate income tax rate from 3 percent to 2.75 percent in 2018 and to 2.5 percent in 2019, continuing the business tax reforms that have helped create more than half a million new jobs since Republicans took control of the state legislature in 2011.
• Simplifies and reduces the franchise tax on small businesses by cutting what is effectively a statewide property tax on small businesses and creating a flat $200 tax on the first $1 million of a business's net worth.
• Creates a new economic development fund to help attract major manufacturing projects - like automobile and aerospace manufacturers - to the state.

    In Salaries and Benefits:

• Keeps the plan to dramatically increase average teacher pay from last year's budget, investing $131 million in the first year alone. This is in addition to the substantial teacher pay raises legislators passed in 2014, 2015 and 2016.
• Includes a new plan to let highly-qualified new teachers begin at a higher pay grade on the salary schedule, providing financial incentive to those who accept positions in low-performing schools, are licensed in special education or STEM classes or meet other criteria.
• Provides $28.5 million to substantially increase principal and assistant principal pay, including funds for performance bonuses for principals.
• Includes $10 million in additional compensation for community college employees.
• Provides a $750 or 1.5 percent salary increase - whichever is greater - to most state employees.
• Offers experienced-based step increases to teachers, State Highway Patrol troopers, clerks and magistrates.
• Provides $10 million in the biennium toward hard-to-hire positions across state government, such as health care technicians and nurses.
• Designates roughly $4 million to allow Gov. Cooper to increase the base salary ranges for many state workers.

    In Education:

• Increases funding for public education by more than $600 million over two years.
• Fully funds K-12, community college and public university enrollment growth.
• Invests an additional $10 million in recurring dollars in textbooks and digital resources.
• Codifies the legislature's intent to use data it is currently gathering from local school systems in accordance with state law to fund a new salary allotment for kindergarten through fifth grade program enhancement (music, arts, physical education) teachers beginning in the 2018-2019 school year.
• Supports the new N.C. Teaching Fellows Program through the N.C. Education Endowment Fund.
• Protects the Read to Achieve, Teach for America, and Communities in Schools programs from being cut by the Department of Public Instruction to fund bureaucracy.
• Provides additional assistance to community colleges for workforce training programs.
• Honors the commitment to fully fund the N.C. Promise Program, which guarantees in-state undergraduate students at three schools across the state pay just $500 per semester for tuition.
• Includes over $20 million in new funding for medical education, including funding increases to the UNC School of Medicine for approximately 30 new slots for medical students and to the school's Asheville campus.
• Directs $1.5 million to the Cheatham-White Scholarship Program, which will provide state matching funds for up to 20 scholarships at both North Carolina Central University and North Carolina A&T University, beginning in the 2018 fall semester.

    In Transportation:

• Establishes a new Roadside Environmental Fund dedicated to funding for vegetation management, mowing, litter prevention and removal, beautification efforts, rest areas, and guardrail replacements. The revised net appropriation for the Roadside Environmental Program is $104,000,000 in each year of the biennium.
• Increases funding for the Strategic Transportation Investments Program (STIP) by $320 million over two years, which will allow 100 new highway projects to be added over a ten-year period.
• Includes $246 million to improve structurally deficient bridges across the state, adds $130 million to improve the condition and safety of existing roads and increases funding for pavement preservation by $70 million, extending the life of thousands of miles of roads.
• Invests $40 million to fund immediate need construction projects across the state that improve mobility and safety, reduce congestion and spur economic development.
• Includes $208 million over two years for a Roadside Environmental Fund dedicated to ensuring the safety and beautification of the state's highways.
• Modernizes the state's transportation network by providing additional funding to airports across the state for infrastructure improvements, and to the State Ports Authority for infrastructure and dredging needs.
• Continues to appropriate approximately $46 million to the Ferry Division, and blocks the Board of Transportation from instituting any tolls on ferry routes that presently do not have a toll.

    In Health and Human Services:

• Provides more than $18 million over two years to add 2,350 new pre-K slots - cutting the waitlist in half for at-risk children.
• Upgrades the Controlled Substance Reporting System that will use advanced analytics to detect and fight prescription drug abuse.
• Invests $18 million to improve North Carolina's child welfare program, including new training and prevention programs, and nearly $4 million to improve accountability and oversight of the system.
• Brings the rainy day fund to $1.838 billion, or 8.2 percent of last year's budget - the largest dollar amount and percentage in state history.
• Adds $120 million to make needed repairs and renovations to state and university facilities.
• Helps preserve North Carolina's military operations by allocating $2 million for the next Base Realignment and Closure (BRAC).
• Funds needed additional positions in the state court system, including 56 new deputy clerks of court and 37 new assistant district attorneys.
• Provides more than $4 million for law enforcement training for North Carolina officers.
• Continues the commitment to improving government transparency by funding a website that makes every state agency, county, and local school district budget available for citizens to view online.
• Aims to make government operations more efficient by investing in a fully-consolidated statewide Enterprise Resource Planning system.
• Helps the office of the State Auditor conduct more specialized audits and allocates funding to assist the state Department of Revenue in identifying and preventing tax fraud.

    "The Senate's balanced budget invests in key priorities that will benefit all North Carolinians by strengthening education, cutting taxes on the middle class, enhancing public safety, saving for the next recession, improving the health of our citizens and building new roads that connect our communities," Cook said. "Our aim is to meet the simple, but crucial demand of our citizens-a state government that puts the needs of its own people first."

• Contact: Jordan Hennessy
•     jordan.hennessy@ncleg.net