Under the Dome

SUNDAY DOME: House airs concerns on Senate budget

Rep. Jason Saine, left, talks with Rep. James Boles at the legislature. Saine has led hearings on the Senate budget.
Rep. Jason Saine, left, talks with Rep. James Boles at the legislature. Saine has led hearings on the Senate budget. ehyman@newsobserver.com

The Senate was relatively short on talk with its version of the state budget. Senators spent about six hours of floor debate on the 500-page bill, which includes many major policy provisions.

The House held nearly 12 hours of floor debate on its version, which has far fewer policy matters.

Both chambers’ budget versions are set to be the subject of lengthy negotiations that should produce a settled spending plan for the current fiscal year, which began July 1, by mid-August.

And while Senate leaders have been relatively quiet about the House budget proposal – their main concern is with a 5 percent increase in spending, which they say is too much – it hasn’t been so in the House.

House Republicans have used the past two weeks to air grievances in public committee hearings about various aspects of the Senate budget plan.

“We are fundamentally transforming the economy of North Carolina” through the Senate’s proposed tax changes, said Rep. Jason Saine, the House Finance co-chairman and a Lincolnton Republican. “There are many tax implications that the citizens must consider. This is not something that should be rushed through this legislature.”

Saine’s committee has held three hearings on the financial aspects of the Senate plan.

It allowed for a steady stream of complaints from industry lobbyists, mayors and others – lawmakers included.

House members derided many of the tax changes – including a new sales tax on things like veterinary care and auto repair – as tax hikes, despite Senate leaders’ arguments that income tax cuts will offset any changes.

“These are tax increases,” Saine said, pointing to the expanded sales tax. “If it walks like a duck and talks like a duck, the Senate will tax that too.”

Legislators’ sharpest comments were reserved for the Senate plan to change how sales taxes are distributed. The switch from a primarily point-of-sale distribution formula to a population-based formula would benefit rural counties, while urban and tourism counties would see less revenue.

Rep. Paul Stam, an Apex Republican, said the change would harm the state’s urban economic centers. “You just can’t kill the goose that laid the golden egg and expect it to keep giving,” he said.

Republican Rep. John Bradford of Mecklenburg County called the plan “madness.” And another Mecklenburg Republican, Rep. Charles Jeter, said he’d reviewed the Communist Manifesto to understand the plan’s “redistribution of wealth.”

Senate Majority Leader Harry Brown wasn’t in the room to defend his sales tax plan, nor were any other budget writers from his side of the building.

Rep. David Lewis, a Dunn Republican, was among the only House members with anything positive to say about the Senate budget.

“I think there are some good things in this bill that we seriously need to consider,” he said, although he didn’t elaborate.

In addition to the Finance Committee, several House budget subcommittees also met last week to discuss the Senate budget.

House leaders say the goal is to provide guidance for the chamber’s negotiators before the negotiating begins in what will surely be closed-door talks. Past budget conference committees have involved about a dozen legislators total, so many won’t have a seat at the table.

“For us having this discussion, those who are put on the conference committee will know the direction of most of the members of the House, and I think it’s a correct way to do that – to air this out,” Saine said.

Airing the disagreements publicly also had a side effect: One-sided discussions in House committees resulted in plenty of negative headlines about the Senate budget plan.

Colin Campbell

McCrory says adding policy items to budget is ‘very improper’

Gov. Pat McCrory said in an interview it is wrong that his major jobs plan is now a part of ongoing negotiations over the state budget, saying the issue has him “the most impatient” six months after the current lawmaking session began.

McCrory opened this year calling for resolution on a jobs and incentives plan within weeks. That hasn’t happened as lawmakers have advanced competing ideas.

The issue is now included in the budget talks, which have a deadline of Aug. 14. Spending on incentives approved under the plan would not kick in for at least a year.

“They’re putting that into the budget and I think that’s very improper,” McCrory said in an extended interview for the Domecast, a weekly podcast on government and politics produced by The News & Observer and The Insider state government news service.

“I think we’re putting ... too much policy in the budget and not separating that from the budget. Those are the things a lot of legislators, and myself, said that we wouldn’t do because we criticized the Democrats for doing that for the last 25 years.”

McCrory added: “I was very critical of the Democrats for doing that. I’d be a hypocrite if I didn’t criticize my fellow Republicans for repeating that same mistake. And that is putting too much policy in the budget and using that policy as a negotiating tool. That’s not the way to run efficient, effective and transparent government.”

The Senate’s plan also includes tax changes that could shift money among counties – a tax plan that McCrory said he cannot support.

“I don’t think there’s a compromise there,” the governor said.

McCrory called it the “most unconservative thing I’ve seen presented in the legislature in the last decade.”

“It’s a redistribution of wealth,” he said.

One of the key supporters, top budget writer Sen. Harry Brown, a Jacksonville Republican, has said the plan to change how sales taxes are allocated among counties is aimed at better helping struggling rural areas.

This week’s edition of the Domecast, which includes the McCrory interview, is online at http://bit.ly/1dCHXKS