McCrory urges lawmakers to make budget deal

With the final days of the budget year winding down, Gov. Pat McCrory urged lawmakers Monday to make a deal on a state spending plan - and avoid a measure recalculating how counties receive sales tax revenue.

Posted 10:03 p.m. Jun 29, 2015 — Updated 10:13 p.m. Jun 29, 2015

Tyler Dukes

RALEIGH, N.C. — With the final days of the budget year winding down, Gov. Pat McCrory urged lawmakers Monday to make a deal on a state spending plan – and avoid a measure recalculating how counties receive sales tax revenue.

With competing versions of the budget passed in the House and the Senate, legislators were busy Monday drafting a stopgap bill to keep the state operating while the chambers hammer out their differences. But in letters addressed to each of the state's 170 lawmakers, McCrory said that local governments in the state are waiting on the General Assembly to act.

"While 40 state legislatures have passed budgets, our legislature has been in Raleigh almost six months, and now there are efforts under way to extend the session into September or even October," McCrory said. "While your thorough and thoughtful debate is appreciated, the people of North Carolina cannot continue to wait as that honorable work turns into negotiation tactics that stall our progress."

The governor said he supports a 30-day continuing resolution to give lawmakers more time to craft a compromise budget, but he underscored his positions on a number of proposals in the two competing spending plans.

He told lawmakers they need to separate components of his economic development plant, NC Competes, into a clean bill that would extend tax incentives for businesses and reinstate historic preservation tax credits, among other things.

He also pushed the need for infrastructure funding in the form of bond proposals this November as well as comprehensive Medicaid reform, which both chambers are now grappling with.

"We believe that reform should focus on delivery of services, not on rearranging the boxes on a government organizational chart that also gives authority to an unaccountable board," McCrory wrote.

The Senate budget would shift Medicaid out from under the Department of Health and Human Services and put an independent board in charge of it.

But the governor reserved his strongest criticism for a plan that would change how the state distributes local sales tax revenue to counties and municipalities. McCrory has already voiced his opposition to the Senate proposal to send more revenue to rural counties, which urban county leaders say would result in increased sales and property taxes.

"Let me be clear: I will not support any effort to redistribute sales tax dollars from one county to another," McCrory wrote. "This is not a State tax; this is a local tax, and any forced change will result in a tax increase for millions of our citizens and businesses from the coast to the mountains."

Lawmakers are expected to pass a continuing resolution in the next few days, ahead of their July 1 budget deadline.