Senate GOP moves to pull back funds

After a heated debate, the state Senate gave tentative approval Thursday to Senate Bill 13, allowing the governor to cut the current year budget - and making some controversial cuts of its own.

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Phil Berger

The state Senate gave tentative approval Thursday to Senate Bill 13, a measure that gives the governor the power to cut an estimated $400 million from the current year budget. But the bill makes cuts of its own, too, taking back around $140 million of unspent money that's already been allocated to a list of special funds.

The Golden Leaf Fund would take the biggest hit by far, losing its entire yearly allocation of about $68 million. Golden Leaf gets its funding from the Master Settlement Agreement (MSA), the 1998 deal that settled 46 states' lawsuits against big tobacco companies.

The bill takes back other MSA money, too. The Health and Wellness Trust Fund would lose half its annual allotment, more than $17 million. The Tobacco Trust Fund would lose almost $3 million, leaving it with around $5 million coming in.

About 20 other funds would also see pullbacks. The Wildlife Resources Commission, Farmland Preservation Trust and even the General Assembly’s own reserve would have to hand back millions.

Senator Richard Stevens (R-Wake), the bill’s sponsor, told his fellow lawmakers that the money the bill would take back is unspent and unencumbered, and that the funds wouldn’t be cleaned out – just trimmed. “We thought, in all candor, this was the low-hanging fruit,” Stevens said. “This is just the first step.”

“We campaigned on jobs.”

The minority caucus tried to save three funding streams related to job development and business recruiting: the One North Carolina fund, Job Development Investment Grant (JDIG) and Golden Leaf. Senator Doug Berger (D-Franklin) pointed out that most of the sitting senators had promised voters they would work to create jobs. Yet, he said, “the first major legislation moving through the Senate is going to remove the tools we have for job creation.”

Other Democrats warned the cuts would send a negative signal to business owners thinking of moving to the state or expanding here. Budget Chair Pete Brunstetter (R-Forsyth) disagreed. “Yes, we’re sending a signal to business. We’re sending a signal that we’re serious about getting our fiscal house in order. We’re serious about doing the things they have done … to right-size their operations to their revenues.”

After more than half an hour of debate on the Democrats’ amendment, Finance Chair Bob Rucho (R-Mecklenburg) had had enough. He blasted the minority for not doing enough to manage the budget when they were in power. “You spent us to death,” he said, pointing an accusing finger. “Pay attention – this is what you should have done when you had a turn. Don’t come crying about jobs now.”

Senate Leader Phil Berger reminded Democrats they’re looking at a $3.7 billion budget gap. “How many teachers can be saved if we can set aside this $75 million?” He called claims that the cuts would halt business recruitment “overblown rhetoric,” asking, “How many other jobs that are actually out there can we secure if we can save this money now?”

The amendment failed on a party-line vote, 30-18, and the measure passed by the same margin. The Senate will take one final vote on the bill Monday night and then send it over to the House.

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