Democrats reach tentative budget deal

House and Senate Democrats completed a tentative budget agreement for the next two years Friday evening, almost a month after a plan to run North Carolina state government was supposed to be in place.

Posted 7:38 p.m. Jul 31, 2009 — Updated 11:05 a.m. Aug 1, 2009

RALEIGH, N.C. — House and Senate Democrats completed a tentative budget agreement for the next two years Friday evening, almost a month after a plan to run North Carolina state government was supposed to be in place.

Lawmakers said they had wrapped up their work on a proposal expected to spend roughly $19 billion for the fiscal year that started July 1, not including more than $1 billion in federal stimulus money that would help ease the state's worst fiscal crisis in a generation.

"It's really been a hard year, and that's why it's taken us so long," said Sen. Linda Garrou, D-Forsyth, one of the Senate's top negotiators.

The first of two required votes on the final budget bill in each chamber could come as early as Tuesday. The budget's passage after more than seven weeks of negotiations would signal this year's session is about to end.

The final sticking point worked out publicly stemmed around public school spending cuts, which fellow Democratic Gov. Beverly Perdue demanded needed to minimize damage to classroom operations.

She previously called for up to $1.6 billion in new revenue to avoid deep cuts to education and then balked at the idea of an income tax surcharge.

"I am certain the General Assembly understands the need to protect education, and as critical negotiations continue through the weekend, I must have confidence they will end up doing what's right for North Carolina's children," Perdue said on Friday.

Perdue will be asked to sign the budget into law.

Previous proposals called for increasing the average class size in public schools by two or three students, eliminating thousands of teaching jobs. Lawmakers said Friday they would hold the line on classes from kindergarten through sixth grade, but local school districts would have to make cuts in grades 7 through 12 to make up for lower revenue.

The budget proposals approved by the House and Senate each had found spending cuts by increasing the average class size by three students, saving as much as $323 million annually by eliminating money for 6,000 teacher positions.

But those offers were replaced with Friday's final decision.

The level of those spending reductions weren't immediately available Friday night. More details - such as how many hundreds of state positions would be eliminated - would be provided Monday when the budget is finalized and the bill released.

The agreement would give schools flexibility to use other pots of money to hire as many teachers as possible, such as state money for textbooks.

Rep. Mickey Michaux, D-Durham, the House's chief budget negotiator, said he was worried that Perdue wouldn't like the final package.

"I don't think she's going to like it because it doesn't protect (grades) seven through 12. That may be a problem. If we find more money we can probably work it out."

Garrou said she believed only a couple of districts could lose teachers under the proposal. She expected high schools to cut from nonessential services or not teach certain classes that have few interested students this year.

"I can't promise any teacher that they're going to have a job," Garrou said. "This has been an opportunity for (districts) to assess their faculty and which faculty they should keep."

The final agreement also didn't contain a House proposal that would have eliminated funding for teacher assistants in third grade.

Legislative leaders also said late Friday the budget:

would close seven small or aging prisons, leaving open an eighth threatened with closure in Haywood County. Lawmakers said many correction officers would find work in other nearby prisons.

would close the Samarkand Youth Development Center for female delinquents in Moore County but keep open the Dobbs Youth Development Center in Lenoir County.

doesn't touch a program that discounts university athletic and academic scholarships for out-of-state residents, with taxpayers picking up the difference.

The budget negotiations were stalled for much of July, requiring lawmakers to approve three stopgap spending plans to keep state government operating without a budget in place. Perdue signed the third into law Friday afternoon to prevent the government from shutting down over the weekend.

The House and Senate made a breakthrough last week when they agreed to a tax plan, but it quickly collapsed after Perdue complained about a proposed income tax increase.

Senate negotiators left Raleigh after that and suggested a budget could take weeks to approve. But leading Democrats in the House and Senate agreed in principle to a second tax plan late Thursday.

The new deal includes a similar income tax increase but exempts most state residents by using a tiered structure.

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