State Politics

NC House overrides budget veto, making the spending plan law

NC state budget deal includes raises for state employees, teachers

A compromise North Carolina state budget would give teachers an average pay raise of 3.3 percent 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 cost-of-living
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A compromise North Carolina state budget would give teachers an average pay raise of 3.3 percent 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 cost-of-living

The N.C. House voted 76-43 Wednesday morning to override Gov. Roy Cooper’s veto of the Republican-led budget plan, passing the bill into law.

Final approval came three days before the spending plan takes effect July 1 – affecting tax rates, teacher and state-worker salaries, state-agency budgets, jurisdiction over criminal suspects and more.

The Senate had voted to override on Tuesday, just a few hours after the legislature received Cooper’s veto message. In his message, Cooper cited the budget’s income tax cuts and argued it “will cause the state to fail to fund promised teacher salary increases in future years.”

Rep. Nelson Dollar, a Cary Republican and the House’s senior budget writer, disputed the Democratic governor’s assessment. “We have carefully examined the governor’s veto message, we’ve determined that the appropriate course of action for the people of the state of North Carolina is to overturn the governor’s veto,” Dollar said. “This budget follows in that trend that we have established that will keep this state moving forward.”

Two Democrats, Rep. Ken Goodman of Rockingham and Rep. William Brisson of Bladen County, joined all Republicans in voting to override. Another Democrat, Rep. Ed Hanes of Winston-Salem, was present for the session but didn’t vote on the override. Three other Democrats had voted for the budget compromise last week but voted against the override.

No Democrats in the Senate voted for the override on Tuesday.

House Democratic Leader Darren Jackson called on lawmakers to let the veto stand and instead pass a different spending plan.

“There is good in the budget, but it is overshadowed by the bad in my opinion,” he said. “We can work together, but not until we get past all the petty, partisan payback like gutting the attorney general’s office.”

Jackson was referring to a $10 million cut to the budget for Attorney General Josh Stein, a Democrat, which Stein says will result in more than 100 layoffs in the Department of Justice. Budget writers argue that Stein has declined to defend the state in some controversial lawsuits and say the money needed to be diverted to hire more prosecutors.

Salaries

The $23 billion budget will give teachers an average pay raise of 3.3 percent – weighted toward experienced teachers – in the coming year and will raise most other state employees’ pay by a flat $1,000. Teacher pay raises would average 9.6 percent over two years, with the goal of having average salaries reach $55,000 by 2020.

Retired state employees will receive a 1 percent, permanent cost-of-living increase in their pension checks – a provision more generous than what was in the original budget proposals from the House, Senate and governor.

Dollar said Wednesday that the pay increases amounted to $1 billion. “That is a substantial investment in the teachers and the people who serve this state and our retirees,” he said.

But Jackson argued that the cost of income tax cuts would prevent the state from reaching the national average in teacher pay, and he said other state workers could expect “a $1,000 pay raise today, a major jump in what we pay in health insurance tomorrow, and no raise next year.”

Tax cuts

The budget will 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 will 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 will also lower the corporate income tax rate to 2.5 percent from 3 percent.

“We are providing tax relief for middle class working families and businesses, and we’re doing it in a prudent way,” Dollar said.

The rest of the budget

Here are some other highlights from the 438-page bill.

Raise the age: It includes a plan to “raise the age” for 16- and 17-year-old criminal suspects who would be charged in the juvenile justice system starting in December 2019. Those charged with serious felonies would still face prosecution in the adult court system. North Carolina will become the last state in the country to make the change.

Proposed cuts restored: The budget does not cut the Governor’s School of North Carolina, although the Senate had included cuts in its budget. A proposed $4 million cut to the UNC School of Law in the Senate budget has been softened to a $500,000 cut in the final budget.

Funding for Eastern North Carolina STEM, a Northampton County summer program for disadvantaged teens, is included after being cut in a 3 a.m. amendment to the Senate budget. And a Senate proposal to shut down the Wright School, a Durham school for children with disabilities, isn’t in the final budget. Nor did budget writers keep a Senate plan to change eligibility requirements for food stamps and end benefits for thousands of recipients.

Preschool program: The plan would cut by 75 percent a wait list for subsidized pre-kindergarten by adding 3,525 additional slots. Cooper had called for additional funding to eliminate the wait list.

Economic incentives: The budget creates a new jobs incentive program to lure “transformative projects” that will bring at least 5,000 jobs and $4 billion in investment for the state. The state is “on the cusp” of landing a company that would bring more than 8,000 jobs, House Speaker Tim Moore said last week.

Cuts to the governor: Cooper’s veto message also sets the stage for a possible legal challenge to changes the budget makes 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.

Colin Campbell: 919-829-4698, @RaleighReporter

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