State News

House restores some cuts in proposed budget

Posted June 10, 2009 11:10 a.m. EDT
Updated June 22, 2009 4:52 p.m. EDT

State budget

— A proposed state budget and tax plan to ease some cuts inside the spending proposal has cleared two major hurdles in the House and could go to a floor vote late Wednesday.

The House Appropriations Committee recommended a nearly $18 billion spending plan for next year late Tuesday after considering dozens of amendments.

But the chamber's Finance Committee also agreed to $784 million in tax increases pushed by Democrats. The tax package was initially written to generate $937 million, but higher taxes on cigarettes, beer and wine were eliminated in the final version.

The largest piece of the approved tax package would raise income taxes on couples earning more than $200,000 a year and would add a quarter-cent to the state sales tax.

"It's very important because it can restore some of the cuts we have made both in education, health and human services, justice and public safety and other subcommittees," said Rep. Mickey Michaux, D-Durham. "It's not much, but it will help restore a little."

The House Appropriations Committee that Michaux chairs passed a budget proposal that featured only cuts in spending. That budget was being reworked Wednesday with what he called a small amount of revenue.

"It's like taking aspirin for a headache. It may dull the pain a little, but it's still there," he said.

The extra revenue allowed House subcommittees to add $355 million back to the public education budget and $300 million to the Department of Health and Human Services.

House leaders said the restored school funding would save about 5,000 teaching jobs by allowing classes in kindergarten through grade 3 to remain at current sizes – larger classes would mean fewer teachers. The extra money also would prevent some personnel cuts at community colleges and the University of North Carolina system.

Much of the DHHS funding would restore money cut from public health and mental health programs. The Smart Start preschool program would get back $20 million, and cuts to Medicaid programs like physical, occupational and speech therapy were dropped altogether.

"The first thing we looked at was, what can we restore that puts the most services back to individuals across the state?" said Rep. Bob England, D-Rutherford. "Secondly, we looked very closely at Medicaid dollars. Remember, every dollar we put back in Medicaid, we're gaining $3 federal (funding)."

About $50 million in cuts to the Department of Correction would be restored under the proposed budget, and other money given back to justice and public safety programs would keep 179 positions in the Administrative Office of Courts and 155 positions that support district attorneys statewide.

More than $38 million would be put back into a reserve fund for severance payments.

House Republicans like neither deep spending cuts nor the taxes and have said the $4 billion-plus budget gap for next year is exaggerated.