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Easley Signs $18.9 Billion Budget Plan

Posted July 11, 2006

— Gov. Mike Easley signed the state's $18.9 billion spending plan for this year Monday, praising the General Assembly for its commitment to fiscal discipline, education and the mentally ill.

"It's a great budget from top to bottom," Easley said before he signed the budget a week and a half into the fiscal year that began July 1.

The spending plan adjusts the second year of a two-year budget approved last summer, so a late start didn't cause any fiscal problems within state government. A record revenue surplus -- about $2 billion of additional money -- also helped.

With average 8 percent raises for public school teachers and at least 6 percent for university and community college faculty and professional staff, the budget bill spends $943 million on education compared to last year's budget, according to legislative staff.

The bill gave what Easley sought to help at-risk students and poor school districts. Legislators also agreed to hire 100 middle-school literacy coaches, as Easley requested.

"It says to every child in every corner of every county in this state that you will not get left behind in North Carolina," Easley said.

Mental health programs received an additional $95 million to help redouble efforts to improve treatment in community settings. Lawmakers also agreed to issue more than $328 million in debt to replace two mental hospitals and complete work on a third. The bonds are part of more than $672 million in debt to be issued through mid-2010.

The budget partially cut two "temporary" taxes first approved in 2001, dropping the state sales tax by a quarter-penny and the individual income tax rate for the highest wage earners from 8.25 percent to 8 percent.

Most state workers also get a 5.5 percent raise, the highest in 16 years.

North Carolina's budget has changed drastically over the years. For example, in 1986, it totaled $4.9 billion with about 68 percent going to education. In comparison, the 2006-2007 budget allocates about 55 percent to education.

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