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NC House bucks tradition as budget battle heats up

State House leaders are moving ahead with a budget next week, even though the Senate hasn't yet sent theirs over. Senate President Pro Tem Phil Berger went so far as to say there may not be a comprehensive spending plan this year.

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By
Laura Leslie
, WRAL Capitol Bureau chief, & Travis Fain, WRAL statehouse reporter
RALEIGH, N.C. — State House leaders are moving ahead with a budget next week, even though the Senate hasn't yet sent theirs over. Senate President Pro Tem Phil Berger went so far as to say there may not be a comprehensive spending plan this year.

It's tradition at the General Assembly that the two chambers alternate taking the first crack at the biennial budget. In 2021, it was supposed to start in the Senate. But the two chambers' leaders have been deadlocked since April over how much the budget should spend.

House Speaker Tim Moore told the House on Wednesday that the Senate budget is several weeks late at this point.

"It’s gotten lost in the mail," Moore, R-Cleveland, joked. "There may be a special messenger wandering around the building somewhere right now."

The impasse has slowed work on other legislation, too. The House has taken up only a handful of bills in the past two weeks, and the Senate has been largely focused on its own proposals, not House bills.

Meanwhile, Senate leaders, who typically push for lower spending, made two moves this week to limit the size of the budget.

On Tuesday, they rolled out their finance package as a standalone bill. The finance package, which includes changes in taxes and fees, is typically included in the budget because it affects the amount of revenue available for lawmakers to spend.

This year's Senate tax cut package would cost $2.1 billion over the next two years, substantially lowering the revenue available.

On Thursday, Sen. Brent Jackson, R-Sampson, amended the bill to put another $1.4 billion of budget availability in the state's "rainy day" reserve fund.

"We've worked hard to get our rainy day fund up to par, and we've used that numerous times over several hurricanes, even an earthquake and some other incidents that have gone on," Jackson said in a Senate Finance committee hearing. "That will get us to $3.1 billion."

Taken together, the two proposals would halve the current surplus, estimated at around $5 billion, putting pressure on the House to agree to a lower bottom line.

House leaders responded by announcing their first round of budget hearings next week.

"The House has a constitutional responsibility to pass a comprehensive two-year budget out of this chamber," Moore spokeswoman Demi Dowdy said when asked by WRAL News whether the House was proceeding with its own budget.

"Next week, House committees will have some preliminary meetings with stakeholders, members and agencies to get their input for the budget," Dowdy said. "We hope the Senate will send us their budget soon, but the House will be passing a comprehensive two-year budget at some point this session, regardless."

Berger, R-Rockingham, said his chamber and the House are still "pretty far apart as far as where we think [the budget total] ought to be.

"It's not the end of the world if we don't end up passing a traditional budget," he added.

The state hasn't had a new budget since 2018.

In 2019, when Democrats gained enough seats in each chamber to uphold a veto, GOP leaders spent months locked in a bruising budget stalemate with Democratic Gov. Roy Cooper. That deadlock continued last year, when the pandemic limited legislative sessions.

If no budget is passed this year, the state continues to function at its current level of spending. For areas that need year-to-year adjustments, like school enrollment growth or Medicaid, GOP leaders have relied since 2019 on "mini-budgets" – smaller, targeted spending bills.

"I have expressed directly to the speaker, and our appropriations chairs have expressed directly to the appropriations chairs in the House, that, if we get to July 1 without an agreement on a spend number, the pathway to actually adopting the budget becomes more complicated than the pathway to adopting mini-budgets," Berger said.

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