Press Release:

Notable Activity

    This week, the Senate released and approved a $25.7 billion state budget, representing a 3.45% increase over the previous year's spending amount. The budget, Senate Bill 105, not only represents the Senate's priority for state funds, but also includes appropriations of federal funds the state receives from the American Rescue Plan in the amount of $4.9 billion. Of available state revenue, the Senate budget leaves $3.6 billion unappropriated for the 2021–22 fiscal year and $1.9 billion unappropriated for the 2022–2023 fiscal year.

    In addition to appropriating state and federal dollars, the Senate budget includes various policy changes. Perhaps the most controversial of these changes are limitations on the Governor's emergency powers and new limitations on the Attorney General's power to approve certain lawsuit settlements involving challenges to state law.

    The bill now heads to the House, which is expected to make substantial changes to the bill, resulting in leadership from both chambers negotiating a final budget to send to the Governor later this summer.

    Highlights of the Senate's spending plan include:

    Broadband

• $607M to the GREAT Grant program to expand broadband availability in rural areas.
• Authorizes counties to utilize unrestricted general funds or federal funding allocated to the county for broadband infrastructure improvements for the purpose of providing the required county match in the GREAT Grant program.
• $90M to NC Department of Information Technology for broadband stopgap solutions. DIT is directed to distribute $30M in grants over the next three years to local governments, internet service providers, and nonprofits for the provision and installation of infrastructure that will expand the provision of broadband service to unserved and underserved households in NC.

    Capital

• LOTTERY
  • $100M each year in Public School Building Capital Fund
  • $157M in FY21–22; $176M FY 22–23 in Needs-Based Public School Capital Fund
  • K–12 capital = 33% of lottery proceeds in year one; 34.5% in year two
  • Codifies the Needs-Based Public School Capital Fund
    • Priorities:
      • Tier One Counties
      • Counties with greater need and less ability to generate sales and property taxes
      • Counties with high debt-to-tax revenue ratio
      • Projects that address critical deficiencies to adequately serve current and future student populations
      • Projects that combine two or more schools into one new facility
      • Provides county eligibility, use of funds, and matching requirements.
      • Removes provision barring counties from receiving distributions from the Public-School Building Capital Fund for five years if they receive a Needs-Based grant.
• Water/Wastewater
  • $550M to the Viability Utility Reserve to provide grants to water and sewer utilities that have been designated as distressed by the State Water Infrastructure Authority and the Local Government Commission.
  • $500M to the State Drinking Water/Wastewater Reserve to provide infrastructure grants to water and sewer utilities throughout NC.
  • $80M to the State Drinking Water/Wastewater Reserve for grants to water and sewer utilities to be used for asset inventories, merger feasibility studies, rate studies, and training.
  • $100M for a new program to provide grants to local governments for stormwater infrastructure.
• State Capital and Infrastructure Fund (SCIF)
  • $400M to community colleges over next four years.
  • $40M for athletic facilities.
  • $65M to certain counties for courthouse repair and renovation.
  • $17.6M to certain local government for dam repairs.

    Education

• $15M for for broadband access for rural community colleges.
• $1M Small County Recruitment Bonus that provides a bonus of up to $2,000 to match local funds on a 1:1 basis to recruit teachers and instructional support personnel to LEAs receiving funding from the Small County allotment.
• Teacher raises averaging 1.5% in each year of the biennium.
• Increases funding for Average Daily Membership (ADM) by $3.5M and directs $22M to K–12 ADM contingency reserve.
• Creates new school psychologists allotment and provides funding to hire and additional 115 school psychologists ($40.9M).
• $10M in school safety grants.
• Appropriates the remaining federal funds ($338M) from Elementary and Secondary School Emergency Relief (ESSER III) to NC Department of Public Instruction to address statewide needs related to the COVID-19 pandemic. These funds are in addition to funds appropriated in legislation approved earlier this session. The total revised requirements and receipts from ESSER III are $3.6 billion.

    Health and Human Services

• No broad Medicaid expansion; but makes women eligible for coverage 12 months postpartum; as well parents with children being served by the foster care system
• Various appropriations to support Medicaid transformation
• $102.4M in federal funds to support statewide vaccine efforts for populations disproportionately impacted by COVID-19 and improving vaccine confidence statewide
• $15M for "rapid rehousing services" to assist families facing homelessness as a result of COVID
• $1.5M to Atrium Health to expand primary care access to virtual mental health; also provides an additional $1.5M to the NC Statewide Telepsychiatry Program
• $2.1M increase for child welfare workers in county departments of social services

    Tax

• Personal income tax reduced from 5.25% to 3.99% over 5 years
• Raises standard and child deduction amounts
• Phases out corporate income tax over 5 years
• Exempts private/commercial cemeteries and vaccines from property taxation

    Other

• Creates Register of Deeds Grant Program and appropriates $100,000 for grant funds for the preservation of historic records and files. Grants may be up to $1,000 and require 100% county match.