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NC House panel backs next year's budget changes

Posted May 29, 2012

— House budget-writers on Tuesday recommended a $20.3 billion state government spending plan for next fiscal year that eases school district funding reductions and gives public employees and teachers a small bonus four years after their last pay increase.

The measure, approved by the House Appropriations Committee on a voice vote, also sets aside $50 million to respond to conflicts with federal agencies involving adult care home residents with mental illness and for those that need help with bathing and dressing.

The budget adjustment plan for the year starting July 1 would spend 1.7 percent more than the legislature provided for the coming year in the two-year budget approved last year.

About $232 million of the extra revenue comes from tax collections that exceeded projections. Lawmakers also took $30 million out of the One North Carolina Fund, which is used to recruit businesses to locate or expand in the state.

Another $62 million came from the state retirement system. Lawmakers say they put too much into the system last year.

The State Employees Association of North Carolina on Tuesday began running radio ads on Raleigh stations that criticized the GOP plan. The group criticized Republicans for refusing to provide a 1.9 percent cost-of-living increase for retirees.

SEANC executive director Dana Cope said GOP leaders had promised they would use the money set aside in the two-year budget and no longer needed to keep the retirement system financially sound next year for the retiree payments.

"It's a broken promise," Cope said in an interview. "That's not right."

Rep. Harold Brubaker, R-Randolph and the committee's senior chairman, said budget-writers believe the money needs to be put back in the budget for other items.

The proposed House budget spends $631 million less than what Democratic Gov. Beverly Perdue proposed earlier this month.

State budget Dems, state workers criticize House spending plan

Perdue wants a temporary 0.75-cent increase in the sales tax rate that would generate $820 million for the coming fiscal year. Republicans are calling for no such widespread tax or fee increases and argue that people can't afford to send more money to Raleigh amid a slowly recovering economy.

The Republican-controlled legislature last year let a temporary penny increase approved in 2009 by Perdue and the then-majority Democrats expire.

"When you are in the economic times that we have, raising taxes is not the appropriate thing to do," said Rep. Nelson Dollar, R-Wake, a committee co-chairman.

But House Democrats accused Republicans of spending on the cheap again in the name of faux fiscal responsibility by refusing to consider finding more revenues.

"I really think that it's a cop-out to say that we're broke," said Rep. Verla Insko, D-Orange. "There are all kinds of ways we have never discussed that the public would support in the way of revenue enhancement."

Republicans dared Democrats to put their name to a bill that would raise taxes – a risky proposition in an election year. House Democrats have said it's up to GOP leaders, not them, to determine what form new revenues might take.

The full House was expected to debate and vote on the budget adjustments Wednesday and Thursday. The Senate will make its own changes and work out a compromise to present to Perdue. She vetoed the spending plan last year, but the veto was overridden.

Republican leaders proposed one-time $250 bonuses to state employees, teachers and other public-school workers next year, rather than the recurring salary increases that Perdue wants.

Brubaker said they didn't want to use one-time funds at their disposal on permanent salary increases. The workers also would receive an extra week of accumulated vacation.

The bill cuts the amount school districts have to return to the state next year from $503 million to $170 million. Republicans pointed out that the level is less than the more than $300 million in so-called "mandatory reversions" that districts faced the last time Democrats drew up the budget two years ago.

Many Democrats believe the reduction only keeps the status quo for public school spending because it makes up for expiring federal education spending money.

"It doesn't repair the damage, and standing still is going backward effectively," said Rep. Rick Glazier, D-Cumberland.

The House plan includes the creation of a $50 million "Transitions to Community Living" fund, about $10 million of which would be used to respond to findings by the U.S. Department of Justice that the state's reliance on adult care homes to house people with mental illness violates the Americans With Disabilities Act.

Dollar said the $10 million is considered the first payment over several years to help move residents of adult care home to community living arrangements, including a rental assistance program.

The rest of the money, according to Dollar, would be used in part to improve adult care home reimbursement rates to care for residents as federal and state regulators work to streamline eligibility standards for personal care services.

Another $10 million is earmarked for worker retraining programs at community colleges.

18 Comments

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  • Plenty Coups May 30, 2:02 p.m.

    "This is a lie - the budget that was PASSED last year allocated 121 million for raises for state employees this year and now they've decided to break their promise and spend it elsewhere"

    Of course they did. Why any state employee would ever vote for the GOP is beyond me. Paying state employees what they're worth is against their ideology. Don't expect any raises from them...ever. Last year they had enough money (over a billion) but chose to get rid of a penny sales tax as well as cut business taxes. It's a matter of priorities with them and spending money on voter ID's, mandatory ultrasounds for women seeking abortions, huge raises for Tillis' staff, ...those are the priorities with them.

  • rasengineers May 30, 11:23 a.m.

    Robbing the state employees and teachers retirement fund appears to me to be a policy intended to create a self-fulfilling GOP prophecy already playing out in other states. In North Carolina the retirement fund is funded with employee contributions with semi-matching appropriations from the legislature. Historically, the NC retirement fund has been over 90% funded. A number of other states have historically underfunded their state employees retirement fund by as much as 40%, and are now faced with reneging on retirement benefits as a result. The cruel twist to this scenario is that the GOP is blaming the state employees in these states for budget shortfalls resulting from their legislatures underfunding the retirement plans. The GOP solution - convert pension plans to 401k's. Robbing the NC retirement fund appears to me to be a first step in destroying the one decent benefit state employees can count on.

  • xxxxxxxxxxxxx May 30, 11:08 a.m.

    "Rep. Harold Brubaker, R-Randolph and the committee's senior chairman, said budget-writers believe the money needs to be put back in the budget for other items."

    The legislators ALWAYS put state employees dead last. After they get the budget done, if there's anything left over they might throw some crumbs to the employees.

  • xxxxxxxxxxxxx May 30, 10:59 a.m.

    "If the state is so broke they can't give their empployees a raise year after year, why don't they have mandatory retirement?"

    Do you want to be forced to retire at a certain age whether you're ready or not? What if you can't afford to retire, as many people can't anymore? With people living longer and longer lives, it's a frightening proposition to retire at 65 and face 20-30 more years of supporting yourself.

  • verceliay May 30, 10:58 a.m.

    I mean, that is really generous. $250 divided by 4 years is $62.50 annually. Divided by 52 weeks is $1.20 per week. Divided by 40 hr. work week is .03 per hr. or .24 per day.

  • xxxxxxxxxxxxx May 30, 10:56 a.m.

    "Brubaker said they didn't want to use one-time funds at their disposal on permanent salary increases."

    This is a lie - the budget that was PASSED last year allocated 121 million for raises for state employees this year and now they've decided to break their promise and spend it elsewhere claiming that they do not want to use the one-time funds. They wouldn't be one-time funds - it would be the funds they allocated last year when the economy was even worse than it is now.

  • verceliay May 30, 10:53 a.m.

    really.

  • brrrrabbitt May 30, 10:45 a.m.

    Who can anyone vote for now? Republicans spend like Democrats now that it is an election year. And take money from state retirement plan that is not theirs to spend elsewhere, as the Democrats always have.

  • geaton May 30, 10:38 a.m.

    If the state is so broke they can't give their empployees a raise year after year, why don't they have mandatory retirement? So many people here that could leave and the positions closed. I also like the idea of all of us calling in sick. I think the blue flu should go around.

  • reesesbrewcrew May 30, 9:36 a.m.

    Rumor of five days extra leave for state employees, anyone know if true or not?

    Cope is useless!!!

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