The North Carolina House of Representatives released its budget Monday night, setting the stage for a debate over how to spend billions of dollars over the next two years.
Many of the proposals in the budget had rolled out over the past week in committees. Details included increased spending on school safety measures, funding to address the state’s backlog of untested evidence in rape cases, and upgrades to buildings throughout the UNC System including the UNC-Chapel Hill business school and the medical school at ECU.
The details of the House budget aren’t set in stone. The House can still make changes, and so can the Senate after the House finalizes its preferred version. And for the first time since Democratic Gov. Roy Cooper took office in 2017, the Republican-led legislature lacks a veto-proof majority. That gives Cooper at least some negotiating power, with the threat of a veto more real than in years past.
In addition to spending, the budget proposal includes tax changes that would raise the standard deduction for personal income taxpayers by 3.75 percent starting in 2021, and that would reduce franchise taxes on businesses while requiring online “marketplace facilitators,” such as eBay, to collect sales taxes.
For a married couple filing jointly, the standard deduction would increase from $20,000 to $20,750 starting in 2021, with similar changes for other types of personal income taxpayers. When fully implemented, the change would reduce state revenue by about $88 million per year. That’s less than the amount of revenue involved in the proposed franchise tax cut for businesses, which would save businesses more than $230 million annually starting next year. The franchise tax is based on a corporation’s overall tax base in North Carolina.
The budget would also extend tax breaks for airlines, NASCAR and historic preservation projects.
On Tuesday morning, a proposed tax on ride share services like Uber and Lyft were dropped by the House Finance Committee, as were an additional fee on electric vehicles and a new fee on hybrid vehicles. Rep. Julia C. Howard, a Mocksville Republican and senior chair of the committee, said that they were repealed because they were not debated and discussed in committee, which violated the rules, she said.
Cooper announced his own budget proposal in March and said at the time that lawmakers were going to have to pay more attention to his requests than they have in the last two years’ budgets, both of which he unsuccessfully tried to veto.
“I know I won’t get everything I asked for in this budget,” Cooper said when he announced his own spending plan. “But I do believe there is leverage.”
Education funding has been a hotly contested issue in the past, and thousands of teachers are expected to march in downtown Raleigh Wednesday in a protest that will close school for more than half of the students in North Carolina. The budget details released Monday night did not appear to include the specifics of raises for teachers or other state employees, although those could come later. But there were some other notable proposals.
One idea in the budget is to create new grants to expand “advanced teaching roles.” These positions allow schools to “create innovative compensation models that focus on classroom teacher professional growth that lead to measurable improvements in student outcomes,” according to the budget. It’s billed as a way for experienced, driven teachers to earn up to a 30 percent raise if they come up with plans that state officials think will help students do better in the classroom. The program currently receives $1.5 million a year but would double to $3 million by the 2020-21 school year under this plan.
The budget would also spend tens of millions of dollars over the next two years on school safety grants. Schools could apply for funding for anything from physical security upgrades, to hiring school resource officers and mental health professionals, and more. A separate part of the budget would also require a new “census” of school resource officers at public schools around North Carolina to get a better understanding of which areas have the most need, how well trained the officers are, and other related issues.
The budget also seeks to tackle the opioid crisis, by giving an additional $5 million a year to state-run treatment programs as well as creating new programs like addiction help for people in prison and a “quick response” pilot program for treating overdoses that would start in Wilmington and could expand to other areas if successful.
Another part of the budget would spend several million dollars, in both state and federal funding, to modernize the state’s election security. North Carolina election officials are currently at odds with a Florida company over whether the Russian government might have hacked into the company’s software during the 2016 elections, when multiple counties here used the software.
House Speaker Tim Moore, Rep. Jeffrey Elmore and budget leaders plan to hold a news conference on Tuesday afternoon with more details.
The Finance Committee approved the budget on Tuesday, but it moves on to the Appropriations, Committee, where more changes may be made, on Wednesday. It needs to pass that committee before it can go up for a vote by the full House and then, if it passes, be sent to the Senate for further revisions and debate.