NC Legislative Building

The NC Legislative Building in Raleigh.

RALEIGH – N.C. Senate Republican leaders worked the week of May 28 to push through the 2019 biennium budget, packed in House Bill 966, a 338-page document that details the spending of over $48 billion over the next two fiscal years, starting July 1.

The N.C. Senate approved the second reading of the budget on Thursday, May 30, by a 29-18 vote, mostly along party lines with two Democrats voting in favor. Sen. Deanna Ballard (R-Blowing Rock) voted “aye.”

With a few additional amendments, the budget passed the third and final reading by a 30-16 vote, with three Democrats joining the Republicans in approval.

In a statement lauding the budget, Senate President Phil Berger (R-Dunn) criticized state Democrats for their focus on expanding Medicaid, calling it “socialized health care for able-bodied adults.”

Berger lauded HB966 for, he says, increased access to health care for disabled individuals, lower taxes for families and employers, the largest pay increase for state employees in more than a decade and continued teacher pay raises.

Some advocacy groups have criticized the budget.

“Our legislative leaders have chosen to cut taxes for the few and diminish spending in the face of community needs,” the North Carolina Justice Center said in a May 29 statement. “They have blocked the pathway for all North Carolinians striving for financial security and substantially reduced the quality of life that we all deserve.”

The. N.C. Senate budget would have $23.9 billion and $24.68 billion in revenues and expenses for 2019-20 and 2020-21. The totals are roughly the same in the first fiscal year and lower in the second fiscal year compared to the N.C. House version.

The totals represent an increase in spending from the 2017 biennium budget, which originally appropriated $22.9 billion and $23.6 billion for 2017-18 and 2018-19, respectively.

State employees would likely be bigger fans of the N.C. Senate version, which would call for a 2.5 percent pay raise for most state employees in each of 2019-20 and 2020-21. The raises were lauded by the State Employees Association of N.C, who had criticized the N.C. House’s plan for a 1 percent pay raise or $500, whichever was greater.

“Thank you to Senate budget writers for prioritizing state employee pay equity in the Senate’s budget proposal,” Robert Broome, executive director of the SEANC, said in a May 29 statement. “For far too long, state employees have not been made a priority in state budgets. They are often treated as an afterthought of the process. The Senate budget recognizes the sad truth of this inequity, and takes steps to address it.”

The N.C. Senate includes teacher raises from the 2019-20 school year to the 2020-21 term for all teachers with one or more years of experience. According to HB966, in the 2020-21 fiscal year, teachers with 15-24 years of experience would be bumped to $5,050 a month in salary and teachers with 25 years or more of experience would earn $5,252 a month. Currently, teachers with 15 or more years of experience earn $5,000 a month.

The budget also calls for a one-time lump-sum bonus of $500 to the 15-24-year teaching veterans and $1,000 for the 25-year-plus veterans, given out no later than Oct. 31, 2019.

Funding for a summer enrollment program at UNC system schools, which was included in the N.C. House budget, was not specifically laid out in the N.C. Senate version.

The N.C. Senate Bill does not list $25.4 million in funding for the renovation of Wey Hall, which was included in the N.C. House version. Nick Katers, associate vice chancellor for facilities management, said to the Boone Town Council on April 29 that Wey Hall is one of the last campus buildings that hasn’t undergone a major renovation in its lifetime.

The N.C. Senate bill establishes the Medicaid Transformation Fund, which would receive $210 million in 2019-20 and just over $22.3 million in 2020-21. The funds would come from the Medicaid Transformation Reserve.

The standard deductions for taxpayers were bumped up from the N.C. House version. For married couples filing jointly, the standard deduction would go up from $20,000 to $21,000 ($20,750 in the N.C. House version) and for single people, from $10,000 to $10,500 ($10,375 in the N.C. House version).

The Senate version follows the House version in that it does not include $26 million for locally identified economic development projects that were highlighted in Democratic Gov. Roy Cooper’s budget. That included a $1 million grant to the Appalachian Theatre, $500,000 for Blowing Rock streetscape project improvements and $11,000 for signage improvements in West Jefferson.

The “Raise the Age” mandate would receive all funding it required in the N.C. Senate version to fund seven deputy clerk positions that are effective on Jan. 1, 2020, and four district court judge positions effective on Jan. 1, 2021, after the general election of 2020.

The $30 million allocated for rural broadband in the N.C. House version, which Rep. Ray Russell (D-Boone) criticized as allowing what he called inadequate broadband to be used, was cut down to just over $500,000 in the two years.

The Senate includes $133,333 in funding each fiscal year for the Appalachian Energy Center at Appalachian State University.

HB966 now goes back to the N.C. House, which could either approve the state Senate’s changes or pass a different version. Once both sides agree on a budget, it would go to Gov. Roy Cooper, a Democrat, for final approval. Cooper has previously vetoed the Republican-crafted state budget in 2017 and 2018, both of which were quickly overridden by the Republican super majorities.

However, the 2019-20 N.C. General Assembly does not have Republican super majorities. The N.C. Senate margins (29-18 and 30-16) would be veto-proof at more than 60 percent, but the 61-51 margin by which the budget passed in the N.C. House in its third reading would not meet the veto override standard.

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