Still awaiting plan from state Senate, NC House moving forward with budget meetings

Capitol Report

RALEIGH, N.C. (WNCN) – Amid delays in reaching an agreement among Republicans over how much to spend in the new fiscal year that starts July 1, the North Carolina House of Representatives is moving forward with public budget meetings this week as they await a detailed plan from the Senate.

House Speaker Tim Moore (R) told CBS 17 earlier in May that the two chambers were about $500 million apart in what the total spending amount should be for the 2021-2022 fiscal year.

“We really are working to try to bridge that difference,” he said. “A lot of the distinction has to come with the one-time federal money. How do you spend that?”

But, as June approaches, there is still no agreement on that total spending amount, leading to delays in the detailed budget proposal that will still have to be negotiated with Democrats, including Gov. Roy Cooper. The delay has made it more unlikely there will be a new budget in place by July 1.

“Even if we don’t get a budget adopted before the end of the fiscal year, we do not have government shutdowns like you see at the federal level,” said Republican Senate leader Phil Berger. “The importance of actually adopting the budget, I think, is much less than it has been in the past.”

The two chambers alternate which one begins the budget process, with the Senate leading that effort this time.

Last week, Moore jokingly told House members the Senate’s budget plan must have been “lost in the mail.”

Two years ago, Republicans never reached a compromise with Cooper, who vetoed the budget. The main issues at that point were how much of a raise to give to teachers and whether to expand Medicaid to provide health coverage to more low-income people.

The General Assembly proceeded to pass a series of so-called “mini budgets” that included raises for many state employees but did not resolve the disagreement with Cooper on teacher pay raises or Medicaid expansion.

“This General Assembly has had the foresight in years past to see the possibility of not having a budget adopted and making sure that those base functions of government continue to take place,” Berger said.

Republicans in the Senate have proposed cuts to the personal income tax rate and a plan to phase out the corporate income tax beginning in 2024.

Cooper did not propose tax increases in his spending plan. He has called for teachers to get an average 10-percent pay raise over two years. Neither the House nor Senate has shown support for spending as much as Cooper, who laid out a $27.3 billion spending plan for 2021-2022.

The state has a surplus of nearly $5 billion, due in part to the population continuing to grow, tax collections coming in better than expected, and the failure to reach an agreement on the budget two years ago.

Democrats said the state is overdue to make more investments in schools, infrastructure, and other areas. They criticized the Republican tax cut plan.

“We have great needs that weren’t met. A lot of the stuff we’ve been able to do over the past year we’ve done because of the aggressive funding by the federal government,” said Sen. Dan Blue (D-Wake). “We have surpluses because we never adopted a budget.”

Cooper has sounded optimistic about reaching an agreement with Republicans. He’s noted he’s had more conversations with Moore and Berger about a variety of issues than they’ve had in years past.

At a recent press conference, he joked that he had tried to “get rid” of them in the last election and they had tried the same of him. However, voters re-elected Cooper and kept Republicans in control of the legislature.

Blue echoed Cooper’s sentiment about trying to find a compromise but said there’s no guarantee until they see all the details of what the Republicans want to do.

“We’re hoping that we have a budget that doesn’t have so many poison pills that we can’t swallow it,” he said.

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