N.C. $27.9 billion budget receives final votes, now heads to the governor

House Majority Leader John Bell, R-Wayne, speaks on the N.C. House floor. (Image from N.C. General Assembly YouTube channel)

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  • The budget has a surplus of $6 billion, a projected Rainy-Day Fund of $4.75 billion, and a $1 billion State Inflationary Reserve.
  • Democrats were critical that they didn't have input into the budget.

North Carolina’s proposed $27.9 billion budget received final votes Friday and now heads to Democratic Governor Roy Cooper’s desk for a vote. The Senate voted 36-8 and the House 82-25. On Thursday, the House originally voted 84-28 but changed to 85-27, with a similar vote in the Senate, changing from 37-10 to 38-9. Given the bipartisan support from both chambers, it will most likely survive a possible veto by Cooper.

Sen. Brent Jackson, R-Sampson, said he was pleased to see the bipartisan support the budget received yesterday for its first votes, stating it was a testament to the members’ love for the state.

“In my tenure here at the General Assembly, there is one thing I have come to learn, and I have learned it even more this year, that every member sitting in this chamber loves our state,” he said. “We sometimes have different means on how we want to get there and some different philosophies, but at the end of the day, we come together as a team and make it work.”

Some House Democrats, however, were not so cordial with their response on the House floor Thursday.

“There are 51 democrats that were completely cut out of the process,” said Rep. Deb Butler, D-New Hanover. “They were denied the right to influence this budget in any way and it is a disservice to North Carolina.”

Others like Democrat Representatives Brandon Lofton and Carolyn Logan, both of Mecklenburg County, said the budget fails to help families and retirees keep up with inflation.

The Fiscal Year 2022-23 budget of $27.9 billion is a 7.2% increase from the FY 2021-22 budget.

“The good news, North Carolina is well prepared to weather a recession,” Senate Leader Phil Berger, R-Rockingham said earlier this week.

He said the state has a current surplus of $6 billion of which $2 billion is expected to be recurring and the Rainy-Day Fund balance is projected to be $4.75 billion at the end of the biennium, an increase from the $4.25 billion that was projected in the last budget. A $1 billion State Inflationary Reserve was also created in anticipation of a recession. 

Donny Lambeth in House
Rep. Donny Lambeth, R-Forsyth, speaks on the N.C. House floor. (Image from N.C. General Assembly YouTube channel)

Rep. Donny Lambeth, R-Forsyth, called it a fiscally responsible budget that will continue the strong financial footing that North Carolina is on, including its AAA bond rating, one of only 13 states in the nation to have such a distinction.

Among the highlights are salary increases for teachers and state employees. The new starting salary for teachers is increased to $37,000 with additional supplements. Teachers will see an average raise of 4.2%, bringing the average teacher pay raise to 6.7% over the biennium. Over the biennium, including bonuses, teachers will receive an average of 14.2% additional compensation. Non-certified public school employees, like bus drivers, will receive either a 4% pay raise or an increase to $15/hour, whichever is greater.

Senator Dan Blue, D-Wake was critical of the teacher pay raise Thursday on the Senate floor. He cited an example of the starting salary for Bank of America employees is slated to begin at $22/hr or $42,240 a year as opposed to the $37,000 or $19/hr that teachers will be getting as a starting rate. He said it doesn’t help with the 7-10% of the teachers that he said won’t be back in the classroom in September and that others will follow suit.

Most state employees will see a 3.5% pay raise for most state employees, for a 6% raise over the biennium. State retirees will also receive an additional 1% COLA bonus, bringing it up to 4% over the biennium.

Education funding grows to an additional $1 billion over the FY 2021-22 amount for a total of $16.5 billion.

School safety will receive an additional recurring $15 million for the School Resource Officer Grant program, specifically for elementary and middle schools, and an additional $32 million for School Safety Grants to support students in crisis, school safety training, and safety equipment in schools.

The budget also calls for transferring 2% of sales tax revenue — approximately $193.1 million — to the Highway Fund due to declining revenue to support a variety of transportation purposes, increasing to 6% in 2024-25 and thereafter.

Nearly $15 million has also been allocated for mental health resources across the state.

Additional items include $883 million for water and wastewater infrastructure projects, bringing the total amount available for water and wastewater infrastructure for the biennium to $2.5 billion, and $1.8 million was appropriated from the federal Help America Vote Act (HAVA) grant to update and maintain voter lists and to continue enhancing election technology and security improvements.

Butler also complained about the $3 million allocated in the budget for pregnancy centers. 

Deb Butler in House
Rep. Deb Butler, D-New Hanover, speaks on the N.C. House floor. (Image from N.C. General Assembly YouTube channel)

“When women are pregnant, they need prenatal care, they need birth control, they need abortion services, and they need STI/STD testing and these pregnancy centers by their own admission (on their website) do not provide any of these essential services,” she said. “For this reason and a host of others, I will vote no on the budget.”

Rep. William Richardson, D-Cumberland, said the budget lacked the “audacity of excellence to make it a uniquely great North Carolina budget” and called for a special session in the House Friday before the vote to deal with issues like problems with educational testing, water contamination, and the ability of the Research Triangle Park and universities to create an innovation park with a portion of the budget. He also said the gas tax needs to be addressed as well as the state is having trouble keeping up with road issues.

House Speaker Tim Moore, R-Cleveland, said in May that House leaders would work to pre-negotiate the budget with the Senate as much as they could to speed the process — calling it “reverse engineering” — starting with a conference report and getting it resolved. Usually, the legislature begins with a House budget and a Senate budget and brings everything together. Then, they end with a conference report, which represents a joint House-Senate compromise.

Medicaid expansion was not included in the budget, much to the dismay of those who support the issue. The Senate passed the Medicaid Expansion Bill H.B. 149 on June 1 but the House passed S.B. 408, which would direct the state’s health agency to come up with a Medicaid Modernization Plan. 

Both chambers adjourned to reconvene on July 26 and will gavel in and out several times until December 13 in skeletal sessions unless a major issue arises. The new regular session will begin in January.