State News

House, Senate give preliminary approval to state budget

Posted June 29, 2010

— The House and Senate gave preliminary approval Tuesday to the $19 billion state budget.

The Senate passed the budget by a 31-16 vote, while the House passed it by a 66-49 vote. A final vote is set for Wednesday, and it the budget is approved in both chambers, it would be sent to Gov. Beverly Perdue to be signed into law.

"As it stands after today’s vote, this budget is a clear win for the people of North Carolina<" Perdue said in a statement. "We took big cuts and made hard choices, but by (Wednesday) we will have balanced the budget with our priorities intact. Most importantly, North Carolina will be positioned to fully recover from this global economic recession."

The new fiscal year starts Thursday.

Republicans voted against the budget, criticizing both the spending in the plan and how it was crafted.

The spending plan proposed for the new fiscal year after weeks of debate by House and Senate Democratic negotiators seeks to protect more classroom positions in public schools and University of North Carolina system campuses.

By earmarking more North Carolina Education Lottery profits to keep teachers employed in early grades – the most significant funding changes to the distribution since the lottery was created in 2005 – lawmakers believe they will prevent the elimination of 1,700 teacher and other instructional positions. Local school districts eliminated more than 5,000 positions last year.

"There's some really ... innovative ways in here to keep teachers teaching and faculty members teaching in the universities," said House Speaker Joe Hackney. "There are some new ways to minimize the damages."

But job preservation could come at a price for families and the teachers themselves. The bill would allow campuses to raise tuition by $750 per student to help close an extra $70 million in spending cuts lawmakers directed them to make. The measure also gives local school boards and university campuses the option to furlough school employees to offset budget cuts.

Furloughs are unlikely, given all the hoops a local school board would have to go through to direct up to two days in public school furloughs, said Brian Lewis, a lobbyist for the 65,000-member North Carolina Association of Educators, the state's top teacher lobbying group.

"We don't think there should be any (classroom) job losses in the 2010-11 school year," Lewis said.

NC General Assembly 4x3 House, Senate debate state budget

Community college tuition also would go up by $6.50 to $56.50 per credit hour for in-state students.

UNC President Erskine Bowles issued a statement praising lawmakers' efforts to spare education from budget cuts.

"We knew there were going to be significant cuts in every part of state government, and the university (system) took its fair share," Bowles said. "But the legislature really worked hard to help us protect the quality of education we can deliver to our students."

The budget bill contains no broad tax increases but provides a tax credit to small businesses for their unemployment insurance tax.

Senate Minority Leader Phil Berger criticized the $34 million in business tax breaks, calling it a "jobs last budget" that was a "slap in the face to the working families and business owners who drive our state's economy."

The budget also would eliminate two Medicaid programs that pay for aides to help about 38,000 people living at home with bathing, cooking and other personal care needs. The programs would be replaced with two new programs that would save $50.7 million by tighter monitoring of patients who need less assistance or actually don't qualify for the services.

Democratic negotiators wrapped up their work on the final budget Monday after agreeing in principle to the plan over the weekend.

Berger, R-Rockingham, said Republicans weren't included in drafting the proposal and have had very little time to review it before debating and voting on it.

"On the conference report for the budget, you have things that were on neither the House version nor the Senate version (of the budget)," he said.

Republican leaders also said the budget doesn't prepare the state for an estimated $3 billion shortfall next year when temporary tax increases expire and stimulus money runs out.

"The Democrats' answer to getting out of hole is to just dig a deeper hole," Berger said.

State Treasurer Janet Cowell also was critical of the budget because lawmakers decided to withhold $139 million from the state pension fund to help make up for the loss of about $500 million in federal economic stimulus funds.

"Pension contributions function like credit card debt in that they are contractual obligations with compounding interest," Cowell said in a statement. "Left unpaid, the next bill gets bigger and harder to pay. Legislators are setting themselves up for a $1.2 billion pension bill in 2011 – a year in which the projected budget shortfall is $3 billion."


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  • NoFreakinWay Jun 30, 2010

    guess it doesn't matter that Repubs threatened to vote against it, as yesterday's story claimed. Bev is ready to sign it and take claim to getting it done on time, period. Let's see what you do and say next year when she tells us a mandatory 15% tax hike for all is the only way! NC you are a bunch of fools for allowing her to be elected!

  • Garnerwolf1 Jun 30, 2010

    "More grumbling from the comments section." So you're grumbling about grumbling? So does that make you better, or worse, than the folks you're complaining about? After all, grumbling is pretty much the sole reason for comment sections such as this. But you're right, it's much easier to criticize/tear down something than it is to build it.

  • ezLikeSundayMorning Jun 30, 2010

    That pension is a problem. I guess families can't resist credit card debt, why should we expect any better from politicians? :(

  • clayt85 Jun 30, 2010

    More grumbling from the comments section. A quick summary: "Lawmakers should cut spending by slashing programs that everyone else uses. The programs I use, however, are important and should be given additional money."

    In the mean time, I will find amusement in all the people who truly believe they could do a better job crafting a budget for appx 10 million people in a time of economic hardship. Not that I don't think there is a better solution out there, just that people who rant on message boards do not have one

  • Garnerwolf1 Jun 30, 2010

    "10% for next year doesn't seem out of the question" LOL. Given the economics involved, it'll be 3 MORE years before they see a dime. And it'll still be closer to 1% then 10. NC is one of the last states to enter a recession and one of the last to exit. Tax revenue trail any recovery. Given that we're robbing peter to pay paul, and will have to eventually pay back peter - state employees will be at the tail end of a very long list....

  • JustAName Jun 30, 2010

    We are spending $200 million on pre-k and class room reduction, which comes from the lottery ($400+ million). Pre-k is nicey nice for "subsidized child care". Cut all Pre-k programs. Then start slashing departments that are not required to run the state.


  • chfdcpt Jun 30, 2010

    You may want to read the report on the News and Observer. Seems like they shiftedsome things that will result in a $3 Billion dollar shortage for next year. Just check out the link.

  • dholmes22 Jun 30, 2010

    I think it is a shame we consider ourselves the Education State when now we are pricing our own in-state students out of the UNC University system. Why do we continue to increase the costs of tuition during these times of fixed incomes for the middle class, who generally have to pay for not only their children to go to school, but are taxed to send the others? Erskine, why not have your administrators take the furloughs and leave the class rooms alone. I am sure their are plenty of appointees in high paying positions who just come to work when they want and they can take a cut.

  • london12 Jun 29, 2010

    What, no raises for state employees ? This will be the 3rd year in a row. The economy's been atrocious, but starting to turn around. 10% for next year doesn't seem out of the question.

  • ykm Jun 29, 2010

    Whocares I can agree with you and then again. The repubs had a perfect opportunity to propose an alternative budget and didn't. But ya have to say the budget is balanced so ya can only complain so much. Next year will only be worse. The economy will not recover enough and the state is digging a hole it may not get out of. So they will turn to the feds for a bailout. And may get one, but its only postponing the enevitable.