RALEIGH — Members of the State House gave initial approval of their version of the budget on Wednesday afternoon by a vote of 92 to 26 and final approval on Thursday morning, 91 to 23.
The $18.9 billion spending plan was supported by all Democrats and a majority of Republicans.
“The House budget moves North Carolina forward in education, health care, public safety and economic development, while also providing tax relief to all North Carolinians,” said Rep. Michael H. Wray. “Improving and investing in education continues to be our number one priority, and this budget helps us provide a quality education to every child in our state and gives our valuable teachers and state employees a well-deserved pay raise.”
The House budget provides more than $10.7 billion in resources to improve education. This total represents more than $860 million above last year’s budget and is in addition to more than $400 million in expected revenues from the N.C. Education Lottery.
The House budget also provides higher pay raises for teachers and state employees than proposed previously by the Governor and Senate. Public school teachers, community college faculty and professional staff would see a roughly 8 percent increase. State employees will receive a 5 percent pay raise, plus a $300 bonus. Like the Senate, the House eliminated $44.3 million in spending cuts for all local school districts ordered annually since 2003, but also dedicated almost $41.9 million to low wealth school districts.
In addition to funding for education, the House budget provides resources to continue the state’s progress in economic development, health and human services, and public safety programs and our courts, while also providing tax relief to all North Carolinians.
Mental health reforms, which began in 2001, take an enormous step forward in this year’s budget due to $104.2 million dedicated to improving mental health, developmental disabilities and substance abuse services. The House budget for the Health and Human Services also reduces a child care subsidy waiting list and expands the Smart Start early childhood initiative. Unlike the Senate and Governor, the House budget sets aside $53 million in funding to cap the counties’ share of Medicaid expenses at this year’s levels and provides additional relief to counties with the highest populations of Medicaid recipients.
The budget expands the One North Carolina Fund by $11 million and provides $5 million for Small Business Innovation Research grants for entrepreneurs to match federal monies to create new businesses. It continues the Job Development Investment Grant (JDIG) program and provides additional support for growing industries through biotechnology programs and other incentives. Since 2001, JDIG and One NC programs combined have helped created close to 30,000 new jobs across the state.
The House budget provides $163.9 million in tax relief to all North Carolinians. The House budget, like the Senate proposal, would cut the sales tax by a quarter-penny, but only reduces the income tax for high earners from 8.25 percent to 8.125 percent; the Senate decreased it to 8 percent. Unlike the Governor and Senate, the House provides a new tax credit for small businesses that provide health insurance to employees.
As promised by Speaker Black and other House leaders, the 122 page House budget was strictly budget items as opposed to the previously passed Senate budget, which was 167 pages and included several proposed policy changes such as a minimum wage increase and a moratorium on new landfills. “We have policy committees to handle all policy issues and we’re going to have a budget that is strictly budget items without any proposed policy changes,” Speaker Black said at the beginning of the budget process. The House has already passed legislation that would increase the state’s minimum wage from $5.15 per hour to $6.15.
Members of the House and Senate are expected to begin meeting early next week to work out their differences on the state budget for the next fiscal year, which begins July 1.