State budget 'Plan B' announced as negotiations break down between House, Senate

Budget talks appeared close to breaking down in the North Carolina legislature Wednesday, as Republican leaders debate over how — or whether — to spend a $1 billion surplus for the new fiscal year that starts in July.

House Speaker Tim Moore said his chamber plans to make its budget proposal public as early as Monday. Almost immediately, Senate leader Phil Berger said that proposal would be dead-on-arrival in his chamber.

Moore says his chamber plans to debate the House proposal in committee Tuesday and vote to pass it on Wednesday. He expressed frustration that the current budget year ends in less than three weeks and yet the Senate, he said, has shown little urgency on negotiating a new spending plan.

"This is the Plan B on the budget," Moore said Wednesday. "But while we've not been able to reach an agreement with the Senate, we're tired of waiting. We're going to move on, and get a budget done."

There is a tentative budget in place, but it doesn't contain the billion-dollar surplus in potential extra funding. Moore would like to use that surplus; Berger is less inclined to do so.

Raises or bonuses for state workers, extra funding for child care subsidies and a substantial boost to private school tuition vouchers are among the priorities Moore has highlighted — each of which could easily cost hundreds of millions of dollars.

Berger has said he supports boosting the private school tuition funding, but is more skeptical about extra pay for state workers or child care subsidies. If it comes down to it, he said, he'll walk away entirely from negotiations with the House, and let the entire $1 billion roll into the state's savings account instead.

"We've spent a decade and a half trying to make sure that we don't fall into the same trap that the Democrats fell into," Berger said, referring to the GOP takeover of the state legislature in 2010. "Which is, 'If you've got the money, spend it.' I'm disappointed that that's the position they've taken."

Berger added that he hopes to more or less end this year's legislative session on June 30, the last day of the fiscal year, whether a new budget is in place or not.

Moore, however, says state employee pay and child care subsidies are worthy causes. Many state agencies are dealing with skyrocketing vacancy rates as rising wages in the private sector entice state workers to leave. That's not only straining state services, advocates say, but also causing the state to spend extra on training, overtime and — in some cases — hiring private contractors to carry out the work of an agency for more money than it would normally cost.

As for child care, hundreds of millions of dollars in federal aid expires at the end of June. Hundreds of child care centers in North Carolina could close down almost immediately, according to industry insiders and business advocates like the North Carolina Chamber of Commerce.

That scenario could leave thousands of working parents scrambling to find options and possibly forced to quit their jobs — especially since many areas of the state already have months-long waitlists for child care openings — unless the state steps in to replace some or all of that federal funding, advocates say.

“That was also a priority of the House,” Moore told reporters on Wednesday. “We know that’s critical.”

Last year an early draft of the budget by Republicans in the state House proposed an extra $10 million on child care — a fraction of the $300 million industry advocates say will be needed starting this year. The funding was cut from the budget at some point during the secret negotiations between House and Senate leaders.

It remains unclear if the two chambers will agree to any level of child care funding for this coming budget year, when the federal subsidies will be gone.

"We're just not willing to bust the bank," Berger told reporters Wednesday.