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Legislature: N.C. budget bill deal reached

Posted July 3, 2008

State budget
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— North Carolina legislators have reached an agreement on a $21.3 billion state budget, which will be voted on next week.

Save for tinkering with some technical language, House Speaker Joe Hackney and Senate leader Marc Basnight said a deal had been reached after two weeks of negotiations.

"We made some tough decisions that had to be made," Basnight, D-Dare, told reporters.

Gov. Mike Easley complained last week that the budget needed an additional $45 million in savings for the new year, because tax collections were off by an estimated $70 million in May and June.

The chambers agreed to put off until 2010 the elimination of the state gift tax and the expansion of a refundable tax credit for the working poor. Those delays will result in $30 million extra in tax revenue, lawmakers said.

Legislators also reduced projections for existing tax revenues for the coming year due to the slowing economy, according to Hackney and a spokesman for Basnight.

"We think the budget is balanced. We know it's balanced without any of that but we're trying to work with the governor's concerns," said Hackney, D-Orange. "We know that it's a time of economic uncertainty."

Other features in the agreement include:

  • a 3 percent pay raise for teachers and 2.75 percent raise of $1,100, whichever is greater, for all other state workers. Legislators voted against a provision that would've allowed any surplus to go to more raises for teachers.
  • $30 million for Easley's signature More at Four preschool initiative – $15 million less than Easley had requested.
  • an extra $35 million for diesel fuel for school buses and $90 million for teacher performance bonuses. The State Board of Education had requested more money for both items.
  • authorized the state to borrow $857 million over the next for years – more than in either chambers' proposed budget. Some borrowing will be done by taking out new loans based on a portion of bonds that recently have been paid off.

The final budget, which likely will be approved since Democrats control both chambers, would increase overall spending by less than half of the 9-10 percent growth in the budget over the past two years. That's largely because the state had a revenue surplus of less than $100 million during the fiscal year ending June 30, compared to more than $1 billion two years ago.

Easley budget adviser Dan Gerlach didn't immediately respond to the budget deal, saying the governor would have to review the details. Easley, a Democrat who leaves office in January, has never vetoed a state budget bill. He said this week he would not sign a budget that is not balanced.

The new fiscal year started Tuesday, but state government continues to operate since the spending plan only adjusts the second year of a two-year budget passed last summer.

Lawmakers will return Monday night to take the first of two votes on the budget agreement.

Toll roads

Elsewhere at the state Legislature, the state Senate approved a bill Thursday that outlines the fee for not paying tolls on several proposed roads in the area, including the Triangle Expressway in the Research Triangle Park. The maximum fee the Toll Road Authority can charge is $15 for administrative costs. Violators with 15 or more citations could face a $100 fine.

Wrongful conviction compensation

The state House passed a measure to give inmates $50,000 a year for time served because of a wrongful conviction. Lawmakers set a $750,000 cap on the amount an inmate can receive. The bill would also cover the cost for a freed inmate to attend any school in the University of North Carolina or community college system.

The bill is headed to the Senate.

In January, the state agreed to pay Dwayne Dail more than $368,000 - $20,000 for each year he spent in jail. Dail served 18 years in prison for a rape he didn’t commit. DNA tests proved his innocence last year.

11 Comments

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  • twixandbetwwen Jul 4, 2008

    The legislature knows nothing about "Free Enterprise."

  • Eduardo1 Jul 4, 2008

    $90,000,000.00 Bonus money to teachers for doing exactly what they are supposed to do. Educate our children, and this is on top of the salary increase in the budget. Do they take money away from any teachers who's students do not come up to standards. I do not mean to diminish the job that a teacher does, but when you factor in the actual working hours (including planning) they are doing well. We must also remember this is a chosen field of employment, not something that they are forced in to. While the private sector is closing or laying of people, all employees from TOP to bottom in the public sector, should be grateful that they are not taking cuts. In my past 2 years of working I was forced to take pay cuts. "it was either that way or the highway" guess what I did?

  • theinformer1979 Jul 4, 2008

    "Oh great, less money for me so state workers get a pay raise. What's worse than state employee pay raises... are federal employee pay raises. The non-government worker really gets raped during these budget sessions."

    I'd like to know how State Employees' receivin pay raises takes money out of your pockets? If the Legislature didn't provide a raise for their Employees' they wouldn't be handed out checks to the general public. If you think that you, as a "non-government" employee, gets the shaft during the "budget sessions" become a State Employee and then when the next budget session comes around you'll really have something to gripe about.

  • Zach1 Jul 4, 2008

    THEIR PROFITS AREN'T HIGH ENOUGH YET JUST FROM SPECULATING ON BARRELS OF CRUDE AND CHARGING THE HIGHEST INTEREST RATES THEY CAN LEGALLY GET AWAY WITH.

  • Zach1 Jul 4, 2008

    IT'S SO NICE TO KNOW THAT EACH TIME I DRIVE ON A ROAD AROUND HERE I'LL BE HELPING TO INCREASE THE PROFITS OF GOLDMAN SACHS AND MY BUDDIES WHO WORK THERE.

  • DurhamDude Jul 4, 2008

    Oh great, less money for me so state workers get a pay raise. What's worse than state employee pay raises... are federal employee pay raises. The non-government worker really gets raped during these budget sessions.

  • whatusay Jul 3, 2008

    So now the legislature has to make "deals" to balance the budget. What kind of pork and waste was given to whom?

  • gammasandi Jul 3, 2008

    like the "budget priorities" vote, let's see an opinion poll on WRAL re: the eleventh hour spending of the governor and first lady. How have we citizens come to the sad state to allow the politicians to take our money, tell us how to live and to insult us by flaunting their lavish spending when financial hardships are all around us? Have they no shame?

  • Deacons Jul 3, 2008

    mindcrime, I agree, but most people are fooled by the foolish word of the liberals, most people do not look into what they are saying, they simply believe it.

  • WRALSUCKS Jul 3, 2008

    I hope they added a rider for Prince Easleys travel budget

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