State Politics

Cooper vetoes budget – and hints at another lawsuit, as Senate overrides

Gov. Roy Cooper formally vetoed the budget Tuesday morning as Republican legislators moved to finalize the budget plan without the Democrat’s support.

On Tuesday afternoon, the Senate voted 34-14, largely along party lines, to override Cooper’s veto. The House, also dominated by Republicans, is expected to vote to override on Wednesday, passing the budget bill into law.

In his veto message, Cooper cited the budget’s income tax cuts and argued it “lacks structural integrity by failing to account for population growth, inflation and looming federal reductions, by using one-time revenue for recurring expenses, and by adopting a tax plan that will cause the state to fail to fund promised teacher salary increases in future years.”

Cooper’s veto message also sets the stage for a possible legal challenge to the budget’s changes to the governor’s powers. In addition to cutting his office budget by $1 million, the budget also limits the ability of Cooper and his Cabinet agencies to hire private attorneys to help challenge legislation in court.

“The Act contains provisions that infringe upon the governor’s ability to faithfully execute the laws, including the administration of this Act, as required by the Constitution, and violating the separation of powers,” Cooper wrote.

Senate leader Phil Berger read his letter to Cooper responding to the veto. “I’m deeply troubled that you seem to be backing away from the hallmark promises you made to the people of North Carolina” on teacher raises and middle-class tax cuts, Berger said. “I am concerned you would reject these good ideas because they were not your own.”

In his veto message, Cooper again called on the legislature to make changes to the bill rather than overriding his veto.

“These shortcomings can be fixed, and I encourage the General Assembly to do so by capping tax cuts so they benefit the middle class, investing more in public education, and fixing the unconstitutional flaws in this bill,” Cooper wrote. “But in its current form the Act shortchanges North Carolina.”

Senate Minority Leader Dan Blue of Raleigh said senators shouldn’t act so quickly to override and should negotiate with Cooper instead. “It seems immature that we would move on to do this before you would at least try to explore those potential negotiations,” Blue said. “You could have almost unanimity in passing a budget for this state. Imagine the joy and celebration and ecstasy that the public would enjoy if we could do something like that.”

The $23 billion 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.

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.

Cooper has blasted the budget as “irresponsible” since the compromise bill was released last week, but his veto arrived nearly 24 hours after he said Monday he would veto the budget “today.” That prompted criticism from legislative leaders Tuesday morning.

Shortly before the veto arrived, House Speaker Tim Moore and Berger issued a statement about the delay labeled “Is Cooper having second thoughts on veto?”

Berger’s chief of staff, Jim Blaine, joked on Twitter Monday night: “Senate considering sending out search party for allegedly vetoed #ncpol budget.”

Colin Campbell: 919-829-4698, @RaleighReporter