While the state House is busy crafting the first draft of the legislature’s budget this week, Senate leader Phil Berger offered his own list of spending priorities Tuesday.
Speaking to an N.C. Chamber meeting, Berger said the $400 million revenue surplus announced last week is good news but shouldn’t lead to too much new spending.
“We cannot repeat the mistakes of our predecessors,” he said, referring to the Democrats who controlled the legislature until 2010. “We must maintain the budget and spending discipline that helped give us this surplus.”
The Senate will begin its budget work after the House passes its plan, which is expected to come up for a vote next week. Berger ticked through a list of items he wants to see in the final document:
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▪ End an annual transfer of highway tax dollars to budget items that aren’t related to transportation. “There’s still well over $200 million that comes out of our highway fund into the general fund, and we need to stop that this year,” he said.
▪ Double the state’s reserve funds, which Berger said are “severely underfunded.”
“We need to raise our rainy day fund to a minimum balance of $1 billion,” he said. Gov. Pat McCrory has also said the state’s savings are running too low.
▪ Set aside $350 million for a Medicaid reform package.
▪ Increase starting teacher pay to $35,000, something both House and Senate leaders have been promising for months.
▪ Cut taxes, including a switch to single sales factor apportionment for corporate taxes, which would effectively favor companies with extensive property and payroll taxes. That’s necessary to “gain a true regional advantage in the corporate tax climate,” he said, pointing to states like Virginia and South Carolina that already use the single sales factor.
Berger said further cuts shouldn’t be limited to businesses. “Now is the time to focus on cutting the personal income tax significantly,” he said.