News: CJ Exclusives

Late Budget From NCGA Nothing New

But will House join Senate in public budget negotiations?

Senate budget negotiators will meet Wednesday morning in a public “conference committee” meeting to start ironing out differences between three fiscal plans: one proposed by Gov. Pat McCrory and two passed by each legislative chamber. The question is whether House conferees will take part.

Sen. Harry Brown, R-Onslow, on Tuesday announced the 10 a.m. meeting of the Senate Conference Committee handling budget negotiations. Spokesmen for House Speaker Thom Tillis, R-Mecklenburg, have not responded to inquiries over whether the House will be there.

Gov. Pat McCrory has urged an open negotiating process, but first he wants the Senate to vote on a “mini-budget” that last week passed the lower chamber unanimously. The House’s adjusted budget would fund teacher and state employee pay raises, tweak several other line items, and leave the bulk of the budget unchanged from the measure enacted last year.

Republicans may control both chambers of the General Assembly, along with the Executive Mansion, but the 2014-15 fiscal year opened without enacting budget adjustments that were discussed throughout the year’s “short” legislative session. That’s hardly a remarkable occurrence, given the state’s recent fiscal history.

According to the state legislative library’s archives, since 1981 the General Assembly has enacted a budget by the June 30 end of the fiscal year only nine times. Tardy budgets have been the norm over this three-decade period, with six being passed in August, two in September, and one — in 1998 — becoming law Oct. 30, the day before Halloween.

North Carolina operates on a two-year legislative cycle, with a long session in odd-numbered years and a short session in even-numbered years. A two-year budget is passed in the long session. The General Assembly recalculates budget numbers using updated spending and revenue information in the short session.

In May, legislative leaders of both parties anticipated a quick session, but it’s certain that lawmakers will continue to conduct business after the Independence Day weekend.

Medicaid and teacher pay raises are the primary sticking points in this budget recalibration. Those disagreements have sparked tension and, at times, fiery rhetoric among lawmakers.

McCrory, Tillis, and Senate leader Phil Berger, R-Rockingham, have downplayed the rifts.

“There’s a lot of consensus out there. There are some differences, however, in policy implementation,” McCrory said at a June 25 media event with Tillis at the Executive Mansion championing the governor’s education and teacher pay raise plans.

“All of the plans that have been presented care for education, and are making progress in education,” McCrory said. But he was quick to acknowledge that he preferred his proposal.

He said his plan “is the most pragmatic, visionary, long-term, sustainable plan, and this is the plan that I’m pushing from the executive branch level, and it’s a plan that I am pleased the speaker is not only supporting, but I think he is going to be improving upon it,” McCrory said.

“I’m looking forward to further conversations with my good friends in the Senate, Republican and Democrat, and leaders of the House, Republican and Democrat, who can come together,” the governor added.

Tillis, too, spoke of cooperation. “What I want to make sure the people leave with today is not the noise you hear in and around Raleigh about the differences between the House and Senate. They’re not near as great as anybody here would maybe try to report,” Tillis told reporters at the event.

“Anyone who reports that there’s a big gap between the House and Senate isn’t paying attention. You can have the rhetoric, and you can deal with the rhetoric,” Tillis said. “It is a bridgeable gap.”

Tillis is locked in a highly competitive race for U.S. Senate against incumbent Democrat Kay Hagan, who is trying to make the election about General Assembly votes. The longer the short session stretches, the less time Tillis will have to focus on his own campaign.

Art Pope, McCrory’s budget director, tried to smooth over the disagreements at a June 26 Senate Appropriations Committee meeting.

“The governor and the Senate may not be very far apart on the numbers,” and can resolve the differences without affecting other portions of the budget, Pope said.

“I hope you’re right,” said Sen. Tommy Tucker, R-Union, after Pope faced pointed questions during the meeting. “There’s nothing [to be gained from] trading barbs from my standpoint,” Tucker said.

Berger remains steadfast that no final deal can happen without budget certainty on Medicaid. Senate leaders do not want to be blindsided if Medicaid spending outpaces current projections by tens of millions of dollars, as it has in recent years.

“If it takes us a while to do that, then we’re prepared to take the time that’s necessary,” Berger said. But, he noted, both sides “may be closer to trying to figure out the number” on Medicaid.

“[House leaders] at this point are not willing to go with our number. We are not willing to go with their number. And the question is, is there a number in between … that we can settle on,” Berger said.

That is vital, he said, “because we need to know that we have enough money to fund teacher raises” and other items in the budget. “If we make a wrong assumption this year as to what Medicaid spending will be, then that puts into jeopardy a lot of things that we have been working on.”

If Berger is stewing privately over what many have interpreted as a snub by the June 25 press event arranged by McCrory and Tillis — where no senators were present — he’s not expressing any hard feelings publicly.

“It was not something that I knew about in advance,” Berger said of the mini-budget, which the House passed in short order.

Berger’s apprehension about the abbreviated budget was shared by Rep. Rick Glazier, D-Cumberland, among others.

“I am very concerned about abdicating our authority in great measure in this budget if this were to be the only document to pass,” Glazier said of the mini-budget approach.

“It may be doing something more quickly without enough prethought that it may backfire in a lot of respects in the negotiations,” Glazier said.

“If you don’t resolve and move forward on Medicaid issues, which are in essence sort of like kudzu, eating every available bit of breathing space in state budgets, then you’re punting, and you’re not solving much except for one year, and that’s also not solving the education problem,” Glazier said.

Dan Way is an associate editor of Carolina Journal.

Editor’s note: This article was corrected after publication to note that Rick Glazier is a member of the state House.