Raleigh, N.C. — After many hours of sometimes passionate debate, the state House approved its version of Senate Bill 744, the 2014-15 budget, on Thursday night.
House Republican leaders say the $21.1 billion budget will help the state continue its recovery by investing in education and economic development.
"We have traveled a long and challenging road since 2009," when the recession began, said Rep. Nelson Dollar, R-Wake, senior House budget writer. "Today’s budget is sound, it is responsible and it is focused on our highest priorities."
Those priorities, leaders said, include an average 5 percent raise for teachers, a $1,000 raise and extra time off for state workers and additional funding for Medicaid reform.
Democrats praised the House plan as better than the Senate version, but most didn't vote for it.
Many voiced objections to the plan to boost lottery advertising to increase sales to pay for most of the teacher salary increase, including Rep. Paul Luebke, D-Durham, who voted against the lottery back in 2005.
"This House is gambling that the money will there so that the 5 percent can be provided," Luebke said.
Rep. Grier Martin, D-Wake, said he, too, voted against the lottery in 2005 because he was concerned about addiction to gambling.
“What I didn’t expect at the time is that the people who would get addicted to gambling were the people in this room,” Martin said. “We liked the first hit of it so much we decided to double down.”
Rep. Bryan Holloway, R-Stokes, said he didn't like the lottery either but insisted lottery officials had assured him the plan would raise the needed $106 million.
"Folks, either you’re in the gambling business, or you're not. This state’s been in the business for about 10 years," Holloway said. "We need it, we need to spend it. We are dependent on those dollars whether we like it or not."
Rep. Rick Glazier, D-Cumberland, said lawmakers could have done more to correct deep cuts made to education and other state services in recent years but "chose not to" raise revenue to do it.
“Is that really a vision for the state, that we inflict no more damage?" Glazier asked. "Is that really the best we can do?”
Dollar criticized Democrats for not "getting in the game" to help write the spending plan, to which Rep. Duane Hall, D-Wake, retorted, "You won't let us play."
The final vote was 81-36, with eight Democrats voting for the GOP plan and one Republican voting against it.
The measure will receive its second of two required votes in a session set for 8:30 a.m. Friday. It then goes to the Senate, which could choose to accept the changes or, more likely, send it to a conference committee where members of the two chambers work out the differences between their respective proposals.
it's likely to be a difficult process. No two budget bills have been so far apart in the last decade.
Throughout the floor debate, lawmakers offered a series of 37 amendments to the legislation. Most did not succeed in making major changes.
House includes puppy mill language in budget SBI: Rep. Darren Jackson, D-Wake, ran an amendment to keep the State Bureau of Investigation under the control of the Attorney General's Office. Republican leaders used a parliamentary maneuver to kill the proposal without a vote.
Rep. Robert Reives, D-Lee, tried another amendment that would have left the Public Corruption section of the SBI under the Attorney General's Office, arguing that it would help maintain public confidence in the impartiality of investigations.
But Rep. Leo Daughtry, R-Johnston, opposed it, and it failed 47-69.
"What we’re talking about is keeping politics out of the SBI," Daughtry said. "Taking the corruption unit and leaving it under the AG, believing that he is not political, is a fallacy."
EITC: Democrats tried once again to reinstate the state's Earned Income Tax Credit, a refundable tax credit for working low-income people. Rep. Yvonne Holley, D-Wake, proposed to give corporations a smaller tax cut next year, lowering the rate to 5.6 percent instead of 5 percent and using the additional money to restart the tax credit program, which expired last year.
Holley said the credit, which averages about $115, helps working people struggling to make ends meet. But Rep. Julia Howard, R-Davie, and other Republicans said the program is flawed and rife with fraud.
Rep. John Szoka, R-Cumberland, said the state paid an estimated $28 million in fake EITC claims in 2012. Holley countered that low-income workers shouldn't be punished for others' crimes.
"We got banks that stole millions of dollars in fraud. When have we ever stopped a bank?" she said.
Rep. Tim Moore, R-Cleveland, said the credit is obsolete in the wake of last year's GOP tax reforms.
"We’ve lowered taxes across the board in this state. This is no longer needed, my friends," Moore said.
But Luebke said the reforms have helped the wealthy far more than the poor.
"The 20,000 filers who are millionaires will have a tax break this year of $310 million," he said. "This amendment simply asks you to help 1 million tax filers to the tune of $100 million. It is only fair to help the working poor and working families."
Rep. David Lewis, R-Harnett, accused Democrats of seeking to "go back to the days of class warfare" and said he doubted the state credit would lift anyone out of poverty.
"We are doing what we can to raise up every person in the state," Lewis said. "Much more has been returned to that same taxpayer in the changes we have made."
The amendment failed 41-73.
Voucher money: Rep. Ken Goodman, D-Richmond, ran an amendment to take away the $10 million set aside for the state's new "Opportunity Scholarship" private school voucher program, using the money instead to reduce class sizes in primary grades.
Goodman and Glazier argued the voucher program violates the state constitution, an argument the program's architect, Rep. Skip Stam, R-Wake, insisted was wrong.
The amendment elicited anger from Rep. Marcus Brandon, D-Guilford, who supports the voucher program. He said his fellow Democrats didn't make those arguments when lawmakers approved vouchers for children with disabilities.
"There is nothing unconstitutional about giving poor and minority children the same opportunity as other children," Brandon said. "Any time there’s something in this chamber for poor and minority kids, we have a problem."
Rep. Ed Hanes, D-Forsyth, compared the push for vouchers to the civil rights movement, quoting Dr. Martin Luther King's "I Have a Dream" speech in an impassioned speech. The amendment failed 43-71.
Both Brandon and Hanes ended up voting for the final budget plan.
Film tax credit: After a defeat in the House Finance Committee on Wednesday, Rep. Ted Davis, R-New Hanover, tried again to restore incentives for film productions in North Carolina.
Davis proposed turning the program into a grant through the Department of Commerce, rather than a tax credit. The amendment supplies only $5 in funding, but Rep. Ruth Samuelson, R-Mecklenburg, said that would change in final budget talks with the Senate. Adding it to the House plan, she said, "puts the program on the table for negotiations in the conference process."
Davis and Rep. Frank Iler, R-Brunswick, said they would prefer to extend the existing credit instead but didn't have the votes to pass it.
"I’ll go along with whatever we can get. We’ll take half a loaf," Iler said. "(Losing) 4,200 jobs is like closing a Pillowtex (textile plant) or another industry and sending them to Georgia. All that’s moving out of state if we don’t do something reasonable here."
"Let's keep the ball rolling," added Rep. Becky Carney, R-Mecklenburg.
The amendment passed 90-26.