My fellow Democrats and I joined together early Friday to give final approval to a $20.3 billion budget.
This budget sends a powerful, unmistakable message that education remains the top priority of this state’s Democrats. It addresses the needs of our students at all levels by increasing education spending an additional $1.3 billion, a considerable investment in the future of this state and our young people. House Democrats take particular care in this plan to ensure that we provide resources in public schools to those who need it most — poor people and those at risk of dropping out of high school. We also propose spending that would help our universities and community colleges remain the envy of the nation and recommend increasing access to these institutions by providing more need-based financial aid.
At the same time, this proposal is fiscally responsible. After the natural disasters in 1999, the state had no remaining money in reserve. This budget adds $315 million to the state’s savings, bringing the total to more than $900 million.
The budget also provides nearly $290 million in balanced tax relief and doesn’t raise or create any taxes. It is mindful of people’s pocketbooks and small business. It increases child-care subsidies and hires an additional 80 school nurses, a critical piece in assuring that some students get the supervision, care and medical attention they may not otherwise receive.
We also provide $100 million for Medicaid relief to the counties — a substantial investment in lowering their burden. Half of that money is targeted to those counties with the greatest need so they can better afford to provide other critical services. The other half would be spread among all counties.
I’m very proud of the plan we put together and what it does for everyone across the state. Some of the highlights of it follow below.
As always, please feel free to call or write me if I can be of any help. Thank you for allowing me to share this information with you.
Education
Our budget proposes a 5 percent pay raise for teachers and a $250 bonus for first-year teachers that would raise their salaries to $30,000; $7 million for a dropout prevention program; $20 million more in school funding for at-risk students; $3.2 million more for Gov. Easley’s Learn & Earn program and $6.4 million extra to expand Learn & Earn online. It also includes $2.85 million to hire 60 tutors to help with school literacy programs for struggling eighth-graders.
State Employees will receive a 4.25% pay raise in our budget.
Both community colleges and the university system would get all the money they requested for enrollment growth at their campuses, while community colleges would also get $12.4 million for a facilities and equipment grant program. The community college system received a total of $34 million in additional money, a 3.8 percent increase. This money includes $10 million for equipment and $5 million for advanced planning. This investment will ensure that these critical centers for local education and job training have the money and facilities they need to complete their missions.
Need-based financial aid at the universities would increase by nearly $28 million under the plan. In addition, the governor’s EARN Scholars program would get $75 million over the next two years. The program would provide $4,000 a year scholarships to 12,500 community college and UNC system students with the greatest financial need.
Health
Our proposal would give counties $100 million toward their estimated $517 million Medicaid costs — nearly 20 percent of the total cost. Half of that money would be set aside for counties with the highest percentages of people receiving Medicaid coverage. It is a responsible, thoughtful way to help those counties most weighed down by the cost of Medicaid. This was one of the top priorities of Democrats this session. We’re glad to have alleviated some of the burden of increasing health care costs for the people back home. Please note the table for Northampton, Vance and Warren counties.
Mental health reform remains one of the priorities of this state. In this budget, we increase spending for mental health by about $20 million with a focus on housing, substance abuse treatment, crisis services and employment.
Budget writers also found $8.4 million to subsidize child care costs for an additional 2,000 children and $4 million to hire 80 more school nurses.
Environment
This budget fully funds the Clean Water Management Trust Fund at $100 million, helping to protect the state’s greatest natural resource. It also spends $8 million for farmland preservation and adds money for the top issue for environmentalists this session — additional inspectors for sedimentation and erosion control. Sediment is the biggest water quality problem in the state. The House proposal also sets aside $10 million so that state buildings can adopt energy efficient measures, which are expected to help save money in the future. The budget also sets aside $2 million so that the state can continue working on ways to improve treatment of hog waste.
Finance
Our finance package proposes nearly $290 million in tax relief over the next two years. The package is balanced and offers breaks to low wage earners, small businesses, emerging industries, those planning for retirement, environmentally friendly industries and farmers.
The chief feature is an earned-income tax credit expected to benefit 825,000 taxpayers in North Carolina who earn about $40,000 or less. The change would help offset the costs of other taxes paid by these workers and the estimated tax savings will be $69 million in 2008-09, its first year. The credit is refundable, meaning that in some cases it will not only eliminate the tax burden for low wage earners, but it could put money in their pockets in the form of tax refunds they otherwise may not have received.
Another tax credit would phase out of sales tax on electricity and the excise tax on piped natural gas for manufacturers and farmers. Estimated savings are $14 million in the first year increasing to $42 million by third year.
A change in the tax code allows small businesses to immediately claim tax credits on property and equipment rather than spreading it out over several years. Estimated yearly savings are $36 million for these small companies essential to our economy. Other changes in the tax code are expected to provide $21 million in savings — a total of $57 million.
As you can see, this plan, crafted and approved by Democratic majority in the House, is balanced, offering tax breaks to the poor and those small business people who help drive our economy. We also took care to look out for the people in our state who need help. Education remains our main focus, though, and our plan gives our students, schools and colleges tremendous resources to succeed.
The bill now goes to the Senate and then to the governor. The goal is to have the new spending plan in place before the end of the fiscal year on June 30.
Please remember that you can listen to each day’s session, committee meetings and press conferences on the General Assembly’s website. Once on the site, select “audio,” and then make your selection — House Chamber, Senate Chamber, Appropriations Committee Room or Press Conference Room.
I introduced the following bills:
* HB 1936-Statewide Marketing/Economic Development Commission Funds
* HB 1996-Haliwa-Saponi Economic Development Funds
* HB 2003-Biofuels Incentives
The following people visited my office:
* Autumn Stearne, Guardian ad Litem, Vance Granville, Franklin & Warren
* Mary Jo VanHorne, Guardian ad Litem, Vance, Granville, Franklin & Warren
* Mike Johnson, SEANC, DOT, Northampton
* Grace Edwards, SEANC, Northampton
* Whit Bridgers, SEANC, Northampton
* Raymond R. Vaughan, SEANC, Northampton
* Alcille Davis, SEANC, Northampton
* Walter M. Gardner, Jr., Mayor, Town of Warrenton
* Clara Debnam, Commissioner, Town of Littleton
* Betty Willis, Commissioner, Town of Littleton
* Lynn Harper, Council Member, City of Henderson
* Lou Stultz, Commissioner, Town of Norlina
* Saul Fleming, Chief of Police, Town of Norlina
* Kathy Powell, Embassy Square Foundation, Inc.
The House will return to session Monday at 7 p.m.
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.