My colleagues and I in the House this week focused most of our time on finalizing and passing our version of the budget.
The $18.9 billion spending plan, which was approved overwhelmingly by the House on Wednesday and Thursday, makes much needed investments in education, health and human services, our courts and public safety programs, economic development, transportation and pay raises for teachers and state employees, while also providing more than $160 million in tax relief for all North Carolinians.
Please remember that you can listen to each day’s session, committee meetings and press conferences on the General Assembly’s website at www.ncleg.net. Once on the site, select “audio,” and then make your selection — i.e. House Chamber, Senate Chamber, Appropriations Committee Room or Press Conference Room.
House Passes $18.9 Billion Budget
Members of the State House approved their version of the state budget this week. The House gave initial approval 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. 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.
The House budget continues to moves North Carolina forward in education, health care, public safety and economic development, while also providing tax relief to all North Carolinians. 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 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 we 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. This relief was a top priority for local elected officials and the North Carolina Association of County Commissioners, and I am hopeful the Senate will go along with this proposal.
The House budget provides more than $1.8 billion for justice and public safety programs to reduce crime and keep our neighborhoods safe. We dedicated close to $10 million to hire more than 200 prosecutors, judges and court officials across the state.
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.
In addition to these important investments, the House budget also 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 policy issues,” 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.
In Other News from the Legislature…
New Historic Preservation Tax Credit
Efforts to boost the renovation of hundreds of historic mill sites across North Carolina got a boost Wednesday as the Senate Finance Committee approved a bill providing for tax credits for such projects. Some state and federal credits are already available. The bill (HB 474), which passed the House last year, would expand credits from as low as 20 percent of the rehabilitation costs to as much as 40 percent. The credits vary depending on the economic conditions of the area where the mill would be located and whether the renovated mill would be revenue-producing. The credits have already been factored into the budget being considered by the House.
Cable TV Competition Bill
Legislative committees agreed to create new rules guiding who can provide television through cable or broadband Internet. The nearly identical bills approved in House and Senate committees (HB 2047 and SB 1559) would eliminate the current system of local franchise deals that cities and counties have made for decades with cable television companies. Instead, the bill would turn over franchising authority to the Secretary of State’s Office. Supporters argue the change will make it easier for multiple video programming providers to compete in the same area, leading to lower prices and better service. Critics contend the statewide franchise doesn’t give local governments the same negotiating power with cable television companies to ensure customers will receive service. The House Finance Committee and Senate Commerce Committee rejected amendments that would require television service providers to meet certain service thresholds in a coverage area as soon as three years in entering a market.
Incentives to Save for College
The House gave its final approval to legislation (HB 770) that calls for tax deductions of up to $10,000 per person who contributes to North Carolina’s “529” college savings plan. The plan lets investors set aside money that can grow tax-deferred. The money can be withdrawn free from federal tax if used to pay for college. Other states also provide state income tax benefits, but North Carolina currently does not. The bill would allow taxpayers to deduct from their taxable income up to $10,000 that is contributed to one of these 529 accounts, named for the section of the tax code that allows them. An amendment approved by the House would ensure that married couples filing their tax returns jointly could receive a deduction of as much as $20,000. The measure now goes to the Senate for consideration.
Groups Visiting the Legislature This Week
A group representing hundreds of advocacy groups, local governments and state notables visited the General Assembly on Wednesday in support of a proposed $1 billion bond issue this November for land preservation and park expansions. The “Land for Tomorrow” organization is backing identical pieces of legislation cosponsored by more than half of the Legislature’s 170 members. Bond proponents argue the state’s growing population will make it more difficult to preserve the state’s natural resources and historic landmarks. The measure would permit the state to issue general obligation bonds starting in 2007, phased in over at least three years. The proceeds would be given in the form of grants to four existing conservation trust funds. The group says the money would protect 740,000 acres, protect 6,000 miles of rivers and streams and restore 350 historic landmarks. Bond proponents include former Govs. Jim Hunt, Jim Martin and Jim Holshouser.
More than 100 veterans met with legislators on Wednesday, which was Flag Day, and were honored during session with a resolution that expressed “profound appreciation and gratitude” to past and present service members. North Carolina is home to more than 770,000 veterans and 90,000 military on active duty, including National Guard and reserve members.
Representatives from the NC School Counselor Association, Halifax Electric Membership Corporation and Roanoke Electric Cooperative visited my office.
The House will be back in session on Monday night at 6 pm.
As I’ve said many times before, I hope you will continue to let me know how you feel about the issues that are being debated by the North Carolina Legislature and the challenges you and your family are facing each day.
By working together, we can make Northampton, Vance and Warren counties and all regions of North Carolina a better place to live, work and raise a family.