Legislature: N.C. budget bill deal reached

Raleigh, N.C. — 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.