House gives preliminary approval to spending plan

Posted May 18, 2016

— Despite criticism from leading Democrats, the House voted overwhelmingly Wednesday to give preliminary approval to a $22.2 billion budget proposal.

Moving with uncharacteristic speed in a budget deliberation, the House handled nearly two dozen proposed amendments and then debated and voted 103-12 on the spending plan in less than four hours. A final vote is scheduled for Thursday morning, after which the Senate will begin working on its proposed budget.

Sen. Harry Brown, R-Onslow, the senior budget chairman for the Senate, said that top leaders in his chamber would be in Raleigh on Friday to begin reviewing the House budget and planning their own draft spending plan.

Regarding what he's seen so far from the House budget, Brown said, "We were pretty pleased."

By and large, he said, he expects few major conflicts between the House and the Senate budgets. The biggest differences, he said, would be over salary items. Senators want to put more money into teacher salaries and limit raises for state employees to increases targeted at key positions. That plan is closer to what Gov. Pat McCrory proposed in his budget.

Senate leaders are also contemplating measures that would cut personal income taxes faster than the House, giving the Senate roughly $70 million less to work with in the coming fiscal year.

"We think that's manageable," Brown said.

The House budget would start phasing in over four years an increase to the standard deduction on state income tax returns, raising the amount exempt from state tax by $500 each year for couples filing jointly and by $250 each year for single filers.

"This will allow the working families and those that tend to be at the lower end of the income stream to retain more of the money they have earned and will work for all working people, whether single or not, whether they have families yet or not, to accumulate the wealth to improve their life," said Rep. Bill Brawley, R-Mecklenburg.

The budget also provides an average 4 percent raise to public school teachers, with those in the middle of their careers getting the biggest bumps. State workers would receive a 2 percent raise, and retired state workers would see a 1.6 percent cost-of-living increase.

"It’s not an across-the-board pay increase (for teachers), but this, we believe, this will move us toward an average salary of $50,000. We’ll do that within the next two years," said Rep. Craig Horn, R-Union. "Although this is still nowhere near our goal, it is still a dramatic step forward from when we were 46th in the nation (in average teacher salary) a few years ago."

Another $300 million would be added to the state reserve fund, which Rep. Nelson Dollar, R-Wake, said would leave the fund, often called the "rainy day fund," with a record balance of $1.4 billion.

"This is a responsible budget that does fund our critical needs, does plan for our future and most assuredly moves this state forward," Dollar, the chief budget writer in the House, told his colleagues.

Some Democrats tried to shame the Republican majority, saying they could do more – and North Carolina is worth more – than a responsible budget.

"The only thing stopping us is us," House Minority Leader Larry Hall said. "Our roof has a hole in it, our plumbing is leaking, and we're putting all of our money in the bank.

"You may have done better in the past, but you have to be on a path to do better in the future," said Hall, D-Durham.

"We set our sights way too low," said Rep. Verla Insko, D-Orange. "We are not an average Southern state. We're not an average state. We're better than that."

"Overall, this budget does a lot of good things," said Rep. Marvin Lucas, D-Cumberland. "Could we have done better? I think we could."

Other provisions of the budget would eliminate tolls on state ferries, put more emphasis on academic growth and less on test scores when grading schools, provide money to open a second state crime lab and expand programs for people with mental health problems as well as those for Alzheimer's patients.

Most of the amendments proposed Wednesday were minor tweaks that moved funding from one source to another or made technical corrections, and they passed easily.

There was extensive debate over a suggestion by Rep. Gary Pendleton, R-Wake, to delay further restructuring within the Department of Transportation until lawmakers could review the agency's plans next year. He said hundreds of DOT staffers in Raleigh could lose their jobs or be forced to move to DOT offices elsewhere in the state.

Lawmakers included in last year's budget a program for DOT restructuring to help cut costs and increase efficiency, and leaders of the House Transportation Committee asked their colleagues Wednesday to allow the program to move forward. Several Wake County lawmakers responded by noting that DOT hasn't yet shown that its proposed moves would save money or improve operations.

The delay was approved by a 67-45 vote.

Virtual charter schools were the focus of three amendments.

Rep. Susan Fisher, D-Buncombe, wanted to end a pilot program that allows two virtual charters to operate in the state. She said the $2.5 million being spent on the program would be better spent on textbooks and digital learning tools for students in other public schools.

"A number of studies have shown that virtual schools are not effective. They have not been able to effect the kind of education we want to see in North Carolina," Fisher said.

Horn said, however, that it's too early in the state's trip with virtual charters to "abandon ship," and the amendment was defeated 38-78.

Rep. James Langdon, R-Johnston, was able to change the rules for virtual charters by limiting them to a 25 percent withdrawal rate, and Rep. Rob Bryan, R-Mecklenburg, was able to add carve-outs that wouldn't count students who move out of state, have medical issues or leave a virtual charter within the first few weeks so they don't count against the 25 percent limit.

Two other amendments that could have generated heated debate were pushed to the side.

House Speaker Tim Moore ruled out of order a suggestion by Rep. Julia Howard, R-Davie, to end a state contract to add toll lanes to Interstate 77 north of Charlotte.

The Republican majority tabled an amendment by Rep. Paul Luebke, D-Durham, that would have eliminated a sales tax cap on boats and planes. Currently, people pay sales tax on only the first $50,000 of the purchase price of a boat or plane, and Luebke called that "very, very unfair" and said closing that tax loophole would generate an extra $17 million a year for education.


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