This week the Senate passed its version of the Budget for the next fiscal year.
We started crafting the budget well before the beginning of session to ensure that the budget process is completed in as timely a manner as possible. I am devoting this week’s newsletter to discussing the budget and its ramifications.
The Senate approved the budget last Thursday with bipartisan support. It cuts $800 million in state spending, while still funding my top priorities: creating jobs and helping small businesses, protecting our students and teachers, and supporting access to healthcare to our most vulnerable populations.
CREATING JOBS AND SUPPORTING SMALL BUSINESSES
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I understand how important small businesses are to our state. My father owned and operated Ace Welding and Fabrication in North Carolina for over 30 years. Above is a picture of my father, nicknamed “Doc”, and me outside of one of the small businesses he operated. I want to support the thousands of small business owners in our state who, like my father, support their families with hard work and determination. Now is the time to stand behind these businesses. And that is exactly what this budget does.
Small businesses are the backbone of our economy, and small businesses generate the most jobs. Given the current economic climate, my colleagues in the Senate and I supported our state’s small businesses with tax cuts and increased financial support.
The Senate approved a 50 million dollar tax cut that will benefit thousands of small businesses. Small business owners who pay taxes through personal income taxes (defined as having gross receipts of $1 million or less) will not pay more than the 6.9 percent rate now charged to other corporations.
We also approved additional funding that will help keep small businesses operating in the face of falling revenues. These funding measures include: an additional $1 million for the Small Business Assistance Fund administered by the NC Rural Economic Center, $1.5 million to One NC to increase leverage in matching federal business grants, $3.1 million for a “Home Grown Jobs” initiative that will bring businesses to small towns in our state.
These aggressive programs will not only assist and promote small businesses, including the jobs they create, but the families that they support. These efforts to protect small businesses are just a few of the initiatives that the Senate passed to grow our economy and protect jobs. For a more detailed listing, you can view this quick reference document, or you can view the full budget documents here and here.
PROTECTING EDUCATON
The Senate’s Budget differs from the Governor’s Budget Proposal in cutting the education budget. The Governor’s Budget proposal cut $135 million from the Local Education Agencies. This proposed cut was “flexible,” meaning that the LEAs could exercise their discretion to cut teaching positions opposed to finding reductions elsewhere.
The Senate instituted a much direct approach to protect our teachers, and in turn protecting our students and the quality of education they receive. Instead of allocating one large cut, the Senate targeted cuts directly from administrative and non-instructional areas of an LEA’s budget. This approach means that an LEA will be very limited in its ability to cut teaching positions. The Senate budget also includes a special provision that allows the counties the discretion during this upcoming year to transfer lottery money designated for capital construction to be spent on protecting the jobs of classroom teachers.
The Senate reduced the cuts in education to the lowest percentage of cuts in any major program. Comparing the Education budget with the Health and Human Services budget, Education was cut less than 2% (K-12 education was a 3% cut), while the HHS budget was cut almost 10%.
My colleagues and I understand that Education is vitally important to the welfare of our state, not just for today but for the future. Our overarching policy goal is simple; the future of North Carolina depends on the quality of education our children receive and keep teachers in the classrooms to the fullest extent possible despite the economic downturn.
HEALTH AND HUMAN SERVICES BUDGET
As mentioned above, the Senate chose to implement the deepest cuts to the Health and Human Services Budget, which is the budget that I directly oversee. While we made some difficult cuts in the HHS budget to protect education and eliminate waste and fraud, we have protected some important projects.
The Governor proposed eliminating funding for two programs that the Senate retained. The Governor reduced by $1.6 million funding for Speech Therapy, Physical Therapy and Occupational Therapy for adults covered by Medicaid, and also eliminated $11 million in funding for adult preventative dental care covered by Medicaid.
My committee recommended expanding some important programs, which the Senate approved. We expanded access to health care for our state’s children with a $6.5 million expansion of the Health Choice Program. An additional $1 million was appropriated for hiring of school nurses. Some $14.1 million is allocated for individuals on the AIDS waiting list to receive the prescriptions they so desperately need. We also increased the appropriation from 1.6 million dollars to 2.5 million dollars for the Boys and Girls Clubs across North Carolina.
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Much like last year, the economic recession made balancing this year’s budget difficult to craft. It required tough choices and some deep cuts. The Senate has passed a balanced budget that keeps our core goals for North Carolina intact: creating jobs, protecting education and seeing that our most vulnerable citizens are protected and supported.
As always, I look forward to your thoughts and comments on the issues discussed in the newsletter. Please feel free to respond to any issue whether it was covered in the newsletter or not. It is an honor to serve as your State Senator, and I strive to live up to that honor.
Sincerely,
Doug Berger