General Assembly sends new state budget to Cooper for final approval

Despite concerns, most Senate and House Democrats vote to approve $25.9 billion plan 

The first complete state budget in nearly three years will give teachers and state employees raises retroactive to July 1, spend nearly $1 billion to expand broadband, and billions more on new buildings.

After Gov. Roy Cooper, a Democrat, said Tuesday that he will sign the $25.9 billion legislation, it glided through the legislature with little opposition. The Senate passed it on a 41-7 vote, and the House gave its final approval with a 101-10 vote Thursday

 Senior budget chair Rep. Donny Lambeth

The budget is more than four months overdue. The legislature passed its versions of the budget over the summer, after the fiscal year started on July 1. Legislators then spent months negotiating among themselves, and then with Cooper.

Rep. Donny Lambeth, a Winston-Salem Republican and a senior budget committee chairman called the budget “an extraordinary budget for an extraordinary period of time in our history,” on the final day of debate Thursday.

On Wednesday, Rep. Robert Reives, the House Democratic leader, gave a speech listing items he said were flawed or needed a different approach before saying he would vote in favor.

 House Democratic Leader Rep. Robert Reives

“I believe the negotiations were done in good faith,” he said.

In an interview with Policy Watch this week, Rep. Ashton Wheeler Clemmons, a Greensboro Democrat, said the budget didn’t do enough for education and the environment, but had money for doctoral programs at NC A&T State University, and Guilford County program called Ready for School Ready for Life.

“For our county, I think there are a lot of positive steps forward,” Clemmons said. She ended up voting for the budget.

Sen. Don Davis, a Democrat who represents Greene and Pitt counties, sent out a press release highlighting the money budgeted for a new Brody School of Medicine at East Carolina University. Davis has been working for years to get the medical school money. The budget includes $75.25 million over two years toward the approved construction total cost of $215 million.

 Rep. Dean Arp

“I am thrilled to get this over the goal line,” Davis said in a statement. “It will serve residents in counties across eastern North Carolina for generations to come.”

The budget puts $6 billion over two years into an infrastructure fund for construction and debt payments.

“This is the right budget for the citizens of North Carolina right now,” Rep. Dean Arp, a Monroe Republican and budget committee senior chairman said during Wednesday’s debate.

Democrats vexed by tax cuts, school funding, lack of Medicaid expansion

The overwhelming support from Democrats came despite the inclusion of provisions that they and Cooper have been fighting against for more than a year: a phase-out of the corporate income tax that Democrats said they did not want, and less than full funding for public schools as required by the presiding judge’s order in the longstanding Leandro court case.

Medicaid expansion, for which Cooper has also been fighting for years, is also not in the budget.

North Carolina is one of a dozen states that has not expanded Medicaid to insure low-income adults. Health policy experts consider Medicaid expansion crucial to lowering the state’s uninsured rate and closing racial disparities in access to medical treatment.

The bill also provides that in 2023, Cooper and the governors who follow him will lose the power to declare a long-term state of emergency without agreement from a majority of the other nine statewide elected officials who comprise the Council of State. Republicans had tried through legislation to reverse some of the restrictions Cooper imposed during the COVID-19 pandemic but could not override his vetoes.

 Sen. Wiley Nickel

Sen. Wiley Nickel, a Wake County Democrat running for U.S. House who opposed the legislation on multiple grounds, raised the specter of Lt. Gov. Mark Robinson directing the state’s COVID or other emergency response as the highest-ranking Republican on the Council of State. Robinson opposes statewide mask mandates and has said that elected officials who promote COVID-19 vaccinations should be voted out of office.

Another concern revolved around public education. While the budget includes $100 million for teacher salary supplements meant to help school districts hire and keep qualified teachers, Wake, Durham, Mecklenburg, Guilford, and Buncombe counties won’t get any of that supplement money. Nickel and Senate Democratic leader Dan Blue of Wake County contend the exclusion of those counties is partisan payback. Senate leader Phil Berger said this week those counties can afford on their own to pay teacher supplements.

According to Nickel, Wake is losing out on $4.6 million, Mecklenburg, $4.3 million; Guilford, $2.7 million, Durham, $1.3 million, and Buncombe, $1.1 million they could have received from the salary supplement fund.

Rep. Marcia Morey of Durham was the only House Democrat opposing the budget who spoke against it.

The budget is a product of hard work and has a lot that’s good for the state, Morey said, but there’s too much wrong with it.

“Each of must decide whether the good outweighs the bad or the bad outweighs the good,” Morey said.

 Rep. Marcia Morey

The average 5% raises for teachers over two years, and the 5% for state employees are not enough when the state can afford to do better, Morey said. And with prices for housing and other essentials rising now, bus drivers, cafeteria workers, and state employees should not have to wait until July to see a minimum $15 hourly wage, she said.

Morey also observed that budget does not meet the court mandate to fund the $1.7 billion first installment of Leandro school spending recently ordered by state Superior Court Judge David Lee.

“We have the money,” and children have constitutional right to a sound basic education, she said.

The state started the year with about $6 billion in unspent money, mostly because it had not enacted a comprehensive budget in two years.

Billions in federal COVID-19 and economic rescue funds further fattened state coffers.

The budget leaves about $2.5 billion unspent. By the end of the two-year budget cycle, the state will have $4.25 billion in its main reserve fund.

Morey said her biggest concern is the corporate income tax rate cut. The 2.5% tax — the lowest rate of any state that has such a tax — will be phased out starting in 2025 and hit zero by the end of the decade.

Morey lamented that this change will chiefly help out-of-state corporate shareholders at the expense of state residents.

Taken together, tax cuts in the budget will cost $8 billion a year when fully implemented, Morey said. “It’s a huge price to pay,” she said.