The N.C. Senate voted 38-11 to pass a $23.03 billion compromise budget plan for the coming fiscal year.
Four Democrats joined all Republicans in supporting the budget: Sen. Don Davis of Greene County, Sen. Ben Clark of Raeford, Sen. Joel Ford of Charlotte and Sen. Erica Smith-Ingram of Northampton County.
The budget would give teachers an average pay raise of 3.3 percent – weighted toward experienced teachers – in the coming year, and would raise most other state employees’ pay by a flat $1,000. Retired state employees would receive a 1 percent, permanent cost-of-living increase in their pension checks – a big change from the one-time increase in the House budget and the lack of an increase in the Senate budget.
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The budget would make a series of tax cuts in 2019, a delay from earlier House and Senate tax cut proposals that would have taken effect in 2018. It would reduce the personal income tax rate from 5.499 percent to 5.25 percent and raise the standard deduction – the amount on which people pay no income taxes unless they itemize – to $20,000 for married couples filing jointly from $17,500. It would also lower the corporate income tax rate to 2.5 percent from 3 percent.
Senate budget writer Harry Brown, a Jacksonville Republican, praised the final budget bill. “I think it addresses the needs of this state. I think it controls the growth of spending, which is a successful path we’ve taken over seven years. It moves the state forward.”
In a news conference Tuesday, Gov. Roy Cooper blasted the budget and called on legislators from both parties to vote against it.
“This budget is worse than either the Senate or the House budget, and I think it may be the most fiscally irresponsible budget I’ve ever seen,” the Democratic governor said. “The budget manages to spend $130 million more than either of the chamber’s budgets, but it spends less on teacher pay than either budget. That is a demonstration of priorities that are out of line.”
Asked if he’ll veto the budget, Cooper said “I’ll let you know as soon as it hits my desk. I think this budget is wrong for North Carolina.” If Cooper does use his veto stamp, the House and Senate will have to vote on the budget again, but Republicans likely have the three-fifths majority needed to override a veto.
Senate leader Phil Berger argued that Cooper should support the budget because it includes several of his priorities. He listed a roughly 10 percent teacher raise over two years, tax cuts for the middle class, and $363 million added to the state’s rainy day fund.
“For the first time in North Carolina history, this budget has the state government doing what we insist local governments do” in maintaining savings equal to 8 percent of annual spending, Berger said.
Senate Democrats argued that the budget should spend more on teacher pay raises instead of using about $500 million over two years for tax cuts. Sen. Gladys Robinson, a Greensboro Democrat, said teacher pay should be increased to the national average.
“The way we’re going with the 3.3 percent (average raises), it’s going to take us six years to get there,” she said. “We can go ahead and do that, rather than giving tax breaks to the wealthy and corporations.”
Sen. Angela Bryant, a Rocky Mount Democrat, complained that this week’s schedule left “insufficient time to review the budget in its totality.” The final budget was released to Democrats and the public around 11 p.m. Monday night; the vote took place at 5 p.m. Tuesday.
A final Senate budget vote is scheduled for Wednesday. The House also plans to vote Wednesday and send the budget to Cooper’s desk by the end of the week.