House budget begins to emerge; restores some education funding

The House budget subcommittees are taking their first looks at how funding will be distributed through state government next year.

Posted Updated

Mark Binker
Laura Leslie
RALEIGH, N.C. — House budget subcommittees began looking over their draft budget reports this morning. These are the close-to-finished outlines of what this year's final budget will look like.

It's worth keeping in mind that this is a budget adjustment. Lawmakers are technically making changes to a two-year budget they put in place last July 1. It's also worth keeping in mind we're not seeing the total or final picture today. While the six budget subcommittees are looking at their individual pieces of the plan, nobody has stitched it neatly together yet. There's also some spending and policy that is handled at the "big chair" level that we won't see until the full budget rolls out.

Assuming things go according to plan, the subcommittees will make some adjustments to their draft budgets today. Next week, the full House Appropriations Committee will meet and then the budget adjustment goes to the floor. After the full House approves the plan, it goes to the Senate, where lawmakers will do the same dance all over again. 

While there were some sharp elbows thrown this morning as paper documents were distributed in committee, most of the subcommittee budgets seem to be on the legislature's website now. Remember, you'll be looking at two different pieces for each subcommittee: a money report that lists where funding is being reduced or augmented, and a special provisions package that contains the legal language to make policy changes that go along with the budget. 

We'll update this post as we gather and take a first quick look at each of the subcommittee documents. 


The headline of the day is probably this: The House budget mitigates a big cut that public schools were facing this year.

For the past several years, the budget has included "flexibility cuts," money that school systems must hand back after receiving their initial allotments. Last year, that cut was deepened but schools were able to use $259.3 million in federal EduJobs money to offset more than half the blow.

If no adjustment to the education budget had been made, that flex cut was set to deepen by $75 million effective July 1 at the same time EduJobs money expires. We got a hint earlier in the week that something was in the works to offset that double-whammy, but it wasn't clear what it might be. 

Also unclear: where lawmakers found the money to offset the planned education cuts. 

Click here for documents released Thursday morning.

The education budget rolled out this morning offsets all $330 million or so of those looming cuts, essentially keeping schools funding at the same level as last year. Only $106.4 million of that is "recurring" money that will show up again and again from tax revenue. $226.9 million is one-time money, meaning the state would be spending savings or left-over funds to mitigate the cuts. But once that money is spent, it would be gone and lawmakers would once again be faced with making schools whole again next year. 

The House budget also restores funding to the teaching fellows program. 


Those who are hoping to raise the age at which young offenders are charge as adults will likely be disappointed by this budget. It doesn't appear to contain any of the $9 million needed to start making the shift.

The budget does restore $2.8 million in funding to the family court program and provides more than nearly $700,000 in funding to allow the Greensboro crime lab to start doing DNA analysis. 


The NER subcommittee contains the the Department of Environment and Natural Resources, Commerce Department, Agriculture and lot of smaller agencies.

One of the bigger headlines here may be that the House wants to give the Commerce Department's $9 million in recurring money for the One NC Fund. This is money that the governor controls and uses to lure businesses who may not be eligible for other incentive programs or who may need additional inducements to come to the state.

Oddly, while recurring money is highly sought after by programs, this move is aimed at reducing the amount of money that gets plowed into the incentive program. That's because whatever money isn't used at the end of year revers back to the general fund.

"This should eliminate most of that large cash balance sitting over at Commerce," said Kristen Walker, a legislative budget staffer. 

The most that's ever been spent out of One NC in one year is $8.2 million, she said. 

The budget also eliminates an assistant secretary who oversees the community assistance program. Those community blog grant programs will be overseen by the assistant secretary who is over energy policy. 

That didn't sit well with at least one members of the committee, who said small communities rely on the state for help managing their federal funding.

"I think it may result in less service for our neediest communities," said Rep. Angela Bryant, D-Nash. A representative of the Commerce Department said they had not been told about the potential change.


The budget bill would delay by one year the imposition and/or raising of fees on ferry routes as called for in last year's budget. 


This is a collection of small agencies, including the General Assembly and governor's office.

The headline number in here may be $663,936 in spending to match maintenance of effort requirements needed to draw down $4 million in Help America Vote Act funds. This is money that the State Board of Elections needs to maintain voting machines and maintain the voter database. The governor also included this in her version of the budget.   


Among the changes in the Health and Human Service budget: 

  • increases funding for NC Pre-K by $15 million, which will be an expansion of 1,765 student slots.
  • provides additional funding to "re-base" Medicaid, and $55 million to pay for prior over spending in the program. These help make up for shortfalls lawmakers had to fix in the current budget that would have come back to haunt the program.
  • anticipates $3.8 million in savings from eliminating Medicaid fraud. 
  • continues to anticipate savings in the state's mental health program as local mental health agencies switch to a managed care model for handling patient care. 
  • provides $8.4 million for community health programs, such as smoking cessation and encouraging good nutrition.

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