State budget negotiations are stalled as House and Senate lawmakers are too far apart to reach a deal. Reportedly, there will not be a budget agreement until likely September, following what had initially been a June 30 deadline.
The Senate is prioritizing accelerated personal income tax cuts for North Carolinians, building and legalizing multiple new casinos around the state, and funding a $1.425 billion private endowment project called NCInnovation.
The House wants to install revenue triggers onto the tax cuts as a means of ensuring sufficient state revenue and prefers funding NCInnovation at a lower level annually instead of via a one-time endowment. The two chambers also vary on how much to raise state employee and teacher pay, with the House proposing more than the Senate.
The Senate budget proposed raising average teacher pay by 4.5% over the next two years but increased starting teacher pay by nearly 11% over the same period. The Senate budget also gives state employees a 5% raise over the next two years.
On the other hand, the House proposed giving teachers more than 10% raises over the next two years while raising pay for state employees by 7.5%.
Democrats criticize negotiations
Democrats have begun to seize on the delayed budget agreement, claiming that the legislative Republican supermajorities are incapable of governing.
Rep. Wesley Harris, D-Mecklenburg, accused Republicans of not being able to govern and attributed it to fighting amongst themselves.
Ford Porter, a spokesperson for Democratic Gov. Roy Cooper, echoed similar sentiments in a statement.
“For years, we saw breathless coverage about who was responsible for budget impasses,” Ford said, alluding to times when Republicans needed Democrats to work with them. “This session, with two GOP supermajorities, [North Carolinians] have gotten a close look at the broken NCGA culture [that Republicans have] created.”
Porter goes on to say Republicans have “no ability to work together or govern.”
Gov. Cooper has been arguing that Republicans need to decouple Medicaid expansion from the successful passage of this year’s state budget, citing the delay on an agreement. Cooper signed the Medicaid expansion bill, which included the budget stipulation.
Legislative Republicans do not agree with Democrats’ claims of not being able to govern.
“Democrats must have a short memory considering their own track record on passing budgets,” Sen. Brent Jackson, R-Sampson, told Carolina Journal. “Back when they had control of the legislature, budgets were routinely passed after July 1, teachers were furloughed, and taxpayers were burdened with billion-dollar deficits.”
a divide running deeper than partisanship
There is a mantra amongst North Carolina Republican state House members that goes something like this: “The Democrats are the opposition party, but they are not the enemy. The enemy is the Senate.”
Senate Republicans have a similar perspective toward the House, and this dynamic is especially true when Republicans have supermajorities.
With Republicans holding supermajorities in both chambers and Medicaid expansion being tied to the budget passing, there are no partisan roadblocks for the state budget to overcome. Instead, the hurdles are different priorities of the House and Senate chambers.
“It’s important to note that the friction between the two chambers, House and Senate, is nothing new, and it has little to do with the fact that Republicans are in charge but more about the different priorities of chambers and their membership,” Rep. Jason Saine, R-Lincoln, told Carolina Journal. “Much like the founders of our country knew, our model works because it keeps government in check because of the natural friction between both houses of the legislature.”
Brian Lewis, a lobbyist for New Frame, Inc., has been actively involved in policy matters with the General Assembly since the early 2000s. He draws an interesting analogy, likening this year’s budget negotiations to a repetitive show, playing the same storyline with different actors.
“This is the same movie that’s been playing for the last 23 years; it just has different actors,” Lewis told Carolina Journal. “The Senate has always been willing to play the longer game, the hardball, and they’ve always been willing to walk away too. That is a Senate playbook that I’ve seen since the early 2000s… I think that’s kind of what we are seeing now.”
“Wild, Wild West”
Speaking about the differences between the two chambers, Lewis said the Senate is run a little more top-down, while the House operates more like the “wild, wild west.”
“This is nothing new,” Lewis said. “I remember back in the day when Marc Basnight played the part of the President Pro-Tem, and Jim Black played the part of the Speaker.” Basnight and Black were both Democrats.
Rep. Saine also noted that tensions were just as high between the two chambers when Democrats had power.
“For decades when Democrats were in control of both [chambers], these same dynamics played out, as they should, and budgets were delayed because of the disagreements,” Saine said.
While he noted the natural tensions between the chambers, Saine pushed back against the narrative that the House and Senate are enemies.
“The House and Senate are not enemies,” Saine said. “I would characterize this conflict like those from decades before as intentional discussions that ultimately will get resolved for the betterment of our state.”
Lewis pointed out one major difference between negotiations prior to 2016 and now, noting that delayed budget decisions no longer shut down the state government.
“I think it was the Senate that drove the 2016 continuing resolution that [allows the prior budget to stay] in place now,” Lewis said, adding that he thought it was a good thing for the Senate’s negotiating position. “I think it was a negative for the House [because] it probably took away a little bit of their bargaining position… The Senate has always been willing to go back to last year’s budget.”
Mitch Kokai, who spent almost every day at the state Legislative Building from 2002 to 2005 and now serves as the Senior Political Analyst for the John Locke Foundation, agreed with Lewis’s sentiment.
“I saw how things worked when Democrats had complete control of the budget process,” Kokai said. “I saw how things worked when a Democratic Senate had to work with an evenly divided House. In both cases, loyalty to budget priorities in one’s own chamber often trumped party-line divisions.”