NC budget decisions aren't as painful with $400M cushion

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RALEIGH, N.C. (AP) — North Carolina budget-writers aren't making as many cuts compared to other years since the Great Recession. It made for a less painful process as House Republicans rolled out Thursday portions of a spending plan for the next two years.

Budget panels met to hear spending proposals for six categories of government, led by public education and health. Lawmakers offered amendments before subcommittees approved their proposals, with the last panel wrapping up early Thursday evening.

Appropriations leaders are benefiting from a projected $400 million surplus this year, which also means they had another $835 million more to work with through mid-2017 than anticipated in February. The budget GOP Gov. Pat McCrory proposed two months ago to legislators was based on February figures predicting a $270 million shortfall this year.

"It's the first time since I've been here that I haven't had to cut," said three-term Rep. Craig Horn, R-Union, co-chairman of the House education budget subcommittees. "It's hard not to be enthusiastic."

Democrats argue any additional spending, especially for public schools, don't fully cancel the spending reductions Republicans have implemented since taking over the General Assembly in 2011. They also contend GOP colleagues cut taxes too deeply to provide adequate revenues.

"We're in a hole because of the disastrous cuts to the classroom that we've done over the last several budgets, and this budget does not undo that damage," said Minority Leader Larry Hall, D-Durham.

Here's a look at what the subcommittees offered:

PUBLIC EDUCATION: The proposal, which spends about 2 percent more for education than this year, pays for the costs of educating more than 17,000 additional public school students and 3,300 university enrollees expected next fall.

For the public schools, there's over $50 million more for textbooks and $12 million to help bring broadband to more classrooms. A program to reward the best teachers in schools and those with leadership responsibilities with salary increases would begin in up to 10 districts in fall 2016.

The University of North Carolina system would have to locate $26 million in spending reductions — less than the nearly $50 million in reductions in McCrory's spending proposal. The East Carolina University medical school would get $8 million and Elizabeth City State University $3 million to help address recent financial challenges.

Teachers could receive $50 bonuses for each student who scores well on Advancement Placement exams or on vocational or technical certification tests.

HEALTH CARE: The subcommittee set aside $270 million more next year and $460 million in 2016-17 to pay for the increasing cost of covering Medicaid enrollees. There are no cuts in Medicaid service reimbursement rates to doctors or hospitals, as in previous years.

The subcommittee wants to spend up to $25 million of the proceeds from the pending sale of the Dorothea Dix mental hospital property in Raleigh to convert empty hospital beds in rural areas to provide short-term treatment to the mentally ill.

TRANSPORTATION: Division of Motor Vehicle fees would increase 50 percent across the board and the state gasoline tax would fall 3 cents to 33 cents in the approved transportation subcommittee budget.

The DMV increases had been introduced in a separate bill designed to narrow the long-term shortfall between transportation funds and needs. That bill would have lowered the gas tax to 30 cents, but subcommittee co-chairman Rep. Frank Iler, R-Brunswick, said the tax couldn't be lowered that much because two other revenue-raising provisions — a higher sales tax on car purchases among them — didn't have enough support.

COURTS AND COPS: While McCrory sought $16 million over two years in his budget for state court operations, a House subcommittee proposed much more— roughly $17.5 million each of the next two years. Much of the money will help upgrade courts technology, such as expanding electronic filing of legal documents.

The justice and public safety budget also would equip dashboard cameras on all Highway Patrol cruisers. Currently about one-third have the cameras, said Rep. John Faircloth, R-Guilford, a subcommittee co-chairman. A few hundred thousand dollars are also set aside to train state correctional and state police officers on the proper use of force and to purchase training simulators.

MCCRORY'S TAKEAWAYS: The governor got many provisions he sought in his own budget proposal that would spend $21.5 billion next year, including the creation of a new Cabinet-level Department of Military and Veterans Affairs. But House members declined his requests to move state parks, aquariums and the North Carolina Zoo to the Department of Cultural Resources and to elevate his information technology office into a Cabinet agency.

WHAT'S NEXT: A full House budget, with any teacher and state employee raises, is expected to be released early next week. The bill will have to clear three additional committees before the first of two required floor votes, likely Wednesday.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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