North Carolina Legislature releases new state budget proposal

North Carolina’s new state budget proposal includes additional money for education and billions of dollars for capital projects and tax cuts, but it also would reduce the governor and the attorney general’s authority.

Republican legislative leaders released details Monday of the more than $50 billion spending plan for the current fiscal year and next fiscal year.

Monday’s plan , stymied by negotiations between lawmakers and the governor, was released more than four months after the start of the fiscal year July 1.

State agencies submitted their budget requests earlier this year. Gov. Roy Cooper released his recommendations for how the state should spend the money in spring. The Senate approved its version of the budget June 25 before the fiscal year started. The House approved its proposal Aug. 12. The two chambers of the General Assembly could not immediately agree on a final version of the bill.

After reaching an agreement in late September, legislative leaders decided to include Cooper in the negotiations instead of following the normal lawmaking process. The governor vetoed the last two biennium budgets.

“This budget represents months of hard work and good-faith negotiations between Republicans and Democrats, House and Senate, and our governor,” House Speaker Tim Moore, R-Cleveland, said. “Although we have many differences, we each had the common goal of coming together to create a spending plan for the state, one of the General Assembly’s most important constitutional obligations. In the end, I am confident that we have come together to design a budget that truly meets the most critical needs of all North Carolinians.”

Cooper had said disagreements over teacher pay and education spending was one of the factors in delaying the negotiations. The new proposal includes an additional $1.5 million for education. Teachers will receive an average 6.7% pay increase over the biennium and up to $2,800 in bonuses. The proposal also secures $15 an hour for noncertified school and community college personnel.

Cooper told his teacher advisory committee last month he asked for a 10% raise for teachers in his compromise proposal and higher pay for teacher assistants and school nurses, psychologists and counselors. Even though the proposed pay increase for teachers is below Cooper’s request, it is above both chambers’ previous plans.

Lawmakers plan to set aside $6 billion for the State Capital and Infrastructure Fund in the new proposal. The House previously wanted to invest a historic $9 billion in capital projects, while the Senate proposed spending $4.3 billion over the next two years on the infrastructure and capital improvement plan.

The new proposal maintains the Legislature’s plan to increase the state’s zero-tax bracket from $21,500 to $25,500. It cuts the personal income tax rate from 5.25% to 3.99% by 2027, starting with 4.99% in 2022. It also increases child tax deduction by $500 per child and eliminates state income tax on military pensions.

“We want to make North Carolina the most military-friendly state in the country, and this tax exemption should get us there,” Sen. Jim Burgin, R-Harnett, said in regards to the military exemption.

“Hard copies of the budget are out,” North Carolina Senate Democrats tweeted. “We have 21 hours to read this and determine if it’s a budget that will serve the people of North Carolina.”

The proposal also includes a provision to limit the governor’s ability to shut down the economy because of an emergency. Republican legislators have made three attempts to pass duplicate bills that mirror the provision. All of the attempts have failed, with Cooper vetoing two. The third bill did not make it to a full vote.

Legislative leaders also inserted a provision that would require legislative leaders to sign off on lawsuit settlements involving the General Assembly. Cooper vetoed a bill that mirrors the provision in September, which he called “unconstitutional and unwise.”

Cooper said Thursday he would sign a budget that is “best for the people of North Carolina.” Republican leaders said they are confident Cooper will approve the spending plan.

“We have made significant progress over nearly two months of good-faith negotiations with the governor, and I’m optimistic that the budget will have a strong bipartisan vote and that Gov. Cooper will sign it into law,” Senate Leader Phil Berger, R-Rockingham, said.

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