House Version Of Budget Bill Gets Final OK

May 19, 2016

State House lawmakers are expected to approve a budget proposal with a third and final vote on Thursday, May 18, 2016.
Credit Jorge Valencia / WUNC

House lawmakers have given final approval to a budget proposal. The plan passed its most important vote 103 to 12 Wednesday night with bipartisan support. 

House Republican leaders were practically gleeful.

"I mean this is---this is major," House Speaker Tim Moore said after the vote. "Anytime you get into triple digits on the budget bill---that's a mandate at that point."

Moore said the increases for teachers and state employees were able to loop in even Democrats in what is often a sharply divided group. All Republicans voted for the proposal. The plan got most of its Democratic support from members in rural areas. Most urban democrats voted against it.

House Minority Leader Larry Hall (D-Durham) voted 'no.' He said the state savings, or 'rainy day fund,' is growing at the expense of teacher and state employee raises.

"We artificially starved ourselves," he said on the floor before the vote. "We have funds available, and we've decided not to invest. So our roof has a hole in it. The plumbing is leaking. And we're putting all of our money in the bank."

The Senate will begin rolling out its spending plan over the next few weeks.

Leading members from both chambers will then work on a compromised deal.  Senate Pro Tem Phil Berger and House Speaker Tim Moore announced an agreed-to spending figure of $22.2 billion earlier this month. And because the budget is in the second year of the biennium, no major changes are expected. A final agreement is expected to be sent to Gov. Pat McCrory by July 1.

Here are some highlights to watch out for:

Raises for state employees

The House budget proposes 2 percent raises for state employees and $500 bonuses. Those would be received by July 1. It also proposed a cost of living adjustment for state retirees of 1.6 percent. Senate leaders have signaled they would not support across-the-board pay raises for state employees, but instead want to provide more targeted raises.

Rainy day fund

The budget proposal pours more than $376 million extra into the state's rainy day fund, boosting total state reserves to $1.4 billion.  This amounts to about 6 percent of the annual budget. Leading Republicans have said they hope to have an 8 percent cushion in reserves. While some Democrats have decried the proposal for being tight-fisted,  Speaker Moore said it was responsible fiscal decision.

"We're not promised that this economic growth is going to continue, and we need to budget for that," Moore said in an interview.

Tax Policy

Increases the standard deduction by $500 per year, for four years, for a total of $2,000 for a married couple filing jointly. Supporters say this helps the middle class and low income earners. This would begin in 2017 and is not applicable for tax filers who itemize deductions. The Senate has a more aggressive plan that would expand the deduction by the same amount, but over two years instead of four.

Education

The proposal adds more than $150 million to the state’s teacher pay schedule. Teachers would get their steps and receive raises ranging from 0 to 5 percent based on their experience. Those in the middle of their careers would see the biggest pay bumps. Beginning teachers would get a $1,000 bonus, not a raise; and teachers with 25+ years of experience would get a 2 percent raise and a $1,000 bonus.

Mental Health Task Force

The House budget also includes $30 million for a mental health task force.