State News

N.C. Senate Tentatively OKs Budget

Posted May 30, 2007

— The state Senate on Wednesday tentatively approved a two-year spending proposal that would let a pair of "temporary" taxes expire and would include other provisions backed by Republicans.

For the first time in years, a majority of GOP members joined the Democrats who control the chamber in backing the budget, a $20 billion spending plan for the fiscal year starting July 1.

"I don't think it's a perfect budget," Senate Republican Leader Phil Berger said before the bill was passed 47-2. "On balance, it's the best budget I've seen."

Republican Sens. Andrew Brock of Davie County and Eddie Goodall of Union County were the only senators to vote against the budget. Another senator was absent.

Under the plan, the state would borrow more than $1 billion, largely for a host of education projects that Democratic leaders say are necessary to help train workers and to build research facilities to create high-tech jobs.

It contains no requirement that voters approve the borrowing, which Gov. Mike Easley and State Treasurer Richard Moore would prefer and which would also reduce the interest paid on the debt.

Senate leaders contend borrowing remains cheap, however, and argue that the projects are too important to wait for a vote.

The budget proposal would roll back the state sales tax and the top income tax bracket to pre-2001 levels and would cap the state gasoline tax.

A final Senate vote was expected Thursday.

Meanwhile, a new plan circulating in the General Assembly would lift the Medicaid burden of more than $500 million from local government. To do that, the state would have to take over some local tax revenues.

The move would help rural counties with high Medicaid bills. Metropolitan counties like Wake County could lose money in the deal, but state leaders promise to make up the difference.

"The state believes and we believe that this should be a state responsibility. They are committing to relieve the counties of this burden so they can take care of their local infrastructure needs locally," said Paul Meyer, assistant general counsel for the North Carolina Association of County Commissioners.

As part of the deal, local governments would be given the option to levy new taxes on everything from land transfers to car rentals.


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  • D. May 31, 2007

    I empty the trash but I want to make more than degreed professionals...just once. The world is so unfair.

  • Naughty Monkey May 30, 2007

    Yeah, hopefully so. You're welcome. I know mind friend as well as you would like to recieve more than the teachers, just once.

  • SOCLOSE May 30, 2007

    Thanx, PoorOldWhiteBoy. Well, 4% is better than 2.5%. I guess I'd better take what I can get :) It's still not 5%, but, who knows, maybe next year, right?

  • Naughty Monkey May 30, 2007

    Sorry so much, it would only let me copy paste a little at a time.

  • Naughty Monkey May 30, 2007

    But the Senate agreed to earmark $100 million, compared to $75 million from the House, over the next two years for Easley's college grant program. The program is aimed at helping low-income students get a public university degree without going into debt.

    Easley believes the Senate budget did better on education but is worried that a lot of temporary money would be used for permanent expenses, spokesman Seth Effron said.

    Copyright 2007 by The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

  • Naughty Monkey May 30, 2007

    Health advocates were unhappy that the Senate budget failed to boost mental health spending more and spent $9 million less than the House on NC Kids Care, a new child health insurance plan backed by Easley.

    "It's a budget that ignores working families and appears to have other priorities," said Adam Searing with the North Carolina Justice Center.

    The Senate would raise a host of court fees to generate $37 million to hire hundreds of court workers, including 300 clerks, 60 assistant prosecutors and 10 District Court judges.

    The Senate also would give 4 percent pay raises to rank-and-file state employees - the House gave them 4.25 percent. The Senate also wants to teachers to get an average raise of 5 percent.

    Senators declined Easley's request to change the funding formula for the lottery, and instead provided an additional $37.5 million in tax money - rather than revenue from ticket sales - to help reduce class sizes in early grades.

  • Naughty Monkey May 30, 2007

    "We took a big step in building a knowledge-based economy ... and hopefully putting ourselves in a posture and position to develop new companies," said Basnight, D-Dare, adding that a vote of the people wasn't a must because the projects are so important. "If we don't have places of learning, we can't be competitive."

    The Senate budget, which spends $263 million less than the House proposal, also would set aside up to $16 million from a trust fund that receives money from the national tobacco settlement for cancer research at UNC Hospitals, with that amount rising to $50 million in mid-2009.

    "That may be the prize of the budget," Basnight said.

    Absent from the Senate budget is $100 million in one-time money the House included for the state's 100 counties to help pay their share of Medicaid costs. The Senate, which is working on a long-term solution to the $500 million-plus counties must pay annually, set aside nothing.

  • Naughty Monkey May 30, 2007

    "This is the very first one that I didn't reject out of hand. There are some good things in there, but there are some things in there that I've got a lot of concern about," said Senate Republican Leader Phil Berger, R-Rockingham.

    One concern is the proposal to incur more than $1.2 billion in debt to pay for about 30 university, prison and other government construction projects.

    The debt would be issued without the approval of voters in a statewide referendum. Fiscal conservatives already were upset by the about $450 million in such debt proposed in the House budget.

    Some of the additional debt goes to university research programs - such as a nanotechnology graduate school in Greensboro and energy infrastructure center in Charlotte - and will help North Carolina compete globally for high-tech jobs, Senate leader Marc Basnight said.

  • Naughty Monkey May 30, 2007

    coffers next year to pay for education and health care needs. Easley's budget proposal also retained the taxes.

    "We want those to sunset," said Sen. Kay Hagan, D-Guilford, one of the Senate's chief budget-writers. Senate leaders hoped to hold the first of two required budget votes Wednesday after three committees signed off on the budget by Tuesday evening.

    The Senate wants the sales tax most consumers pay to fall from 6.75 percent to 6.5 percent and the top income tax rate from 8 percent to 7.75 percent. An amendment approved also makes permanent a 29.9 cent-per-gallon cap on the state gasoline tax set to expire next month.

    The tax news pleased Senate Republicans, who didn't dismiss the Democrats' budget immediately for a change.

  • Naughty Monkey May 30, 2007

    Hey KATMAMA, here is what they had on WRAL earlier, but took it off.
    NC Senate Budget Ends Taxes, Borrows More Than House Plan
    Associated Press Writer

    Posted: May. 29, 2007
    Updated: May. 29 7:28 p.m.

    RALEIGH, N.C. — Senate Democrats want to tax less and borrow more than the House in a $20 billion spending plan for next year unveiled Tuesday that also uses some of North Carolina's national tobacco settlement to created a dedicated cancer research fund.

    In what's likely to be a sticking point in final budget negotiations with the House and Gov. Mike Easley for the new fiscal year starting July 1, the Senate plan lets expire two "temporary" taxes first agreed to in 2001, but extended twice since. A portion was removed last year.

    The House's two-year budget approved earlier this month keeps a quarter-penny on the sales tax and a higher income tax bracket for the state's top wage-earners for another two years. Those moves add about $300 million to the government