House Speaker Tim Moore and Senate leader Phil Berger met until midnight Tuesday to work through budget disagreements that had eluded other negotiators.
“Meeting again today,” Moore tweeted around mid-day Wednesday. “Progress made, flagged items down to a handful.”
But that handful includes some of the most contentious issues facing the legislature.
The budget is now more than two months late, and negotiators have “kicked up” issues to Moore and Berger that still remain after hours of private meetings. They hope to agree on a deal by Friday and to vote by the end of next week before the the latest temporary state budget expires on Sept. 18.
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This year’s talks represent the legislature’s longest budget delay since 2002, when the budget was passed in October.
Republicans control both the House and Senate, but they’ve yet to agree on terms to fund teacher assistants and driver’s education. Both chambers say they’d like to include an income tax cut, but those details might not be worked out in time to include a cut in the budget bill.
“I’m optimistic we’ll be able to provide some tax relief to working families,” House Rules Chairman David Lewis said Wednesday.
After a slow start, negotiators agreed Aug. 18 on a $21.735 billion spending target, and on Aug. 27 settled the state employee raise debate with a $750 bonus.
Once remaining disagreements are settled, staffers will need a day or two to draft the compromise bill. House rules require the bill to be publicly released at least 72 hours before aHouse vote.
After months of budget hearings and closed-door discussions in a session that began in the freezing rain of a mid-January Triangle storm, some issues have been resolved but significant differences between the two chambers remain.
UNRESOLVED: Teacher assistants – After the Senate’s budget plan to cut 5,000 elementary teacher assistants put school districts in limbo, both chambers have tentatively agreed to fund the positions at last year’s level.
But negotiators still haven’t agreed on the strings attached to the money. The House wants to let local school districts divert the money to instead hire classroom teachers, but senators want to ban that practice.
If the Senate prevails, 44 school districts that have been diverting a total of $48 million in teacher assistant funds would be affected. Those districts might have to eliminate teacher positions and instead hire TAs.
UNRESOLVED: Driver’s ed – The two sides have tentatively agreed to restore funding for driver’s education, but they’re still negotiating provisions dictating how the program will run.
Senators want legislation to address a recent study from the National Highway Traffic Safety Administration, which found no consistency across the state in overseeing driver’s ed teachers.
The report called for a single state agency to oversee driver’s ed programs, setting a curriculum and end-of-course testing. It said the programs should better engage parents and have standards for training and certifying instructors.
“We’re just trying to get some more oversight on the program itself,” Senate budget negotiator Harry Brown said.
UNRESOLVED: Taxes – House and Senate Finance Committee chairs have struggled to negotiate, and legislative leaders say they might split off tax provisions as a separate bill to avoid further budget delays.
The Senate’s budget bill would cut the personal income tax rate from 5.75 percent to 5.5 percent beginning in 2016. And the standard deduction would increase gradually over a four-year period, meaning a married couple filing jointly wouldn’t owe income taxes on the first $18,500 of income by 2020. A single person wouldn’t owe taxes on his or her first $9,250 in income.
The House didn’t include income tax changes in its original budget, but its leaders say they’ve agreed this week to $110 million in tax cuts, a change the Senate demanded to offset Division of Motor Vehicle fee hikes.
“We’re working hard to make sure we ensure enough revenue to operate government based on our constitutional requirements, but we hope to return some to the people as well,” House Rules Chairman David Lewis said.
RESOLVED: Leandro and Read to Achieve provisions – While House and Senate leaders have pledged to leave most policy issues out of the budget bill, some of the remaining disagreements have little to do with money.
Two education policy provisions were resolved by Berger and Moore this week. The House agreed to drop its proposed changes to the Read to Achieve program, which provides extra help to third-graders who aren’t reading at grade level.
The House budget would have tightened requirements for the program and established a standardized reading test to evaluate students.
Brown said the final budget will instead include the Senate’s education provision, which addresses the state Supreme Court case known as Leandro that requires a “sound basic education” for all students.
That provision says some school districts aren’t complying with Leandro. It would require the State Board of Education to stop giving school districts waivers to avoid accountability measures, and it would give the state board authority to combine adjacent school districts “to ensure that all school systems have the size, expertise and other resources necessary.”
Halifax County, a target in the Leandro case that has three separate school districts, could be affected by the provision. School leaders there weren’t aware of the proposal, Roanoke Rapids interim superintendent John Parker said.
Any effort to combine the three Halifax school districts would face opposition, he said. “Consolidation flies in the face of everything that’s happening to improve education,” Parker said. “What you lose is a lot of the personal attention that students from high-needs circumstances need. ... The real solution lies in how you revitalize your schools.”
RESOLVED: Film production grants – Negotiators announced this week that they’ve agreed to triple the size of the film production grant program to $30 million.
The grant program, which replaced a more generous tax credit, launched this year with $10 million. The fund ran out after grants to three productions, and studios in Wilmington and elsewhere have seen film activity drop substantially.
The Senate budget called for only $10 million per year in grants, and some conservative groups have labeled them “Hollywood handouts.” Brown said senators didn’t change their mind on the program.
“You kind of get to a point where it’s ‘you give me this, I’ll give you that,’ and that’s what took place,” he said.
RESOLVED: Coastal erosion control devices – Brown said Wednesday that negotiators have compromised on terminal groins, a controversial erosion control device that was banned in North Carolina until 2011.
The deal would raise the cap on the devices from four to six, allowing two more beach communities to install the seawalls that extend into the ocean and trap drifting sand. Environmental groups oppose terminal groins, arguing that they result in more erosion elsewhere along the coast.
Senate negotiators had sought to lift the cap entirely, pointing to high demand for groins among beach towns.