RALEIGH, N.C. (WNCN) – Republicans in the General Assembly announced Tuesday they’ve reached an agreement on how much they think the state should spend in each of the next two years, but a spokesperson for Gov. Roy Cooper (D) said the deal “falls far short.”
After closed-door discussions, House Speaker Tim Moore (R) and Senate leader Phil Berger (R) said they’ve agreed spending in the 2021-2022 fiscal year will not exceed $25.7 billion, which would be an increase of 3.45 percent. The next year, spending would not exceed $26.7 billion, an increase of 3.65 percent.
“This agreement builds on the last decade of responsible Republican-led budgets resulting in a boom decade that put North Carolina on a strong trajectory to recover from the recession,” the pair said in a statement.
The announcement came after weeks of talks between the House and Senate leaders and after Speaker Moore recently announced the House would no longer wait for a resolution to the disagreement about the spending limits and planned to move forward with a budget later this month.
Gov. Roy Cooper (D) proposed a $26.6 billion budget for next year. His proposal did not raise taxes.
“Legislative leadership is well aware that this opening announcement falls far short of what our state needs. Real negotiations must occur and the Governor looks forward to working toward an agreement,” said Ford Porter, a spokesman for Cooper.
The announcement Tuesday did not include any specifics when it comes to raises for employees, such as teachers, though Republicans said the budget would include raises.
The Senate likely will vote on a budget plan the week of June 21. After that, it could take a few weeks for the House to go through its budget process and vote. Legislative leaders said they aim to send a budget to Cooper by the end of July.
Though there will not be a new budget in place in time for the new fiscal year that begins July 1, the state government does not shut down because of that.
“We hope to have an agreement not just with the House but also with the Governor on a two-year spending plan. And, I think there are things that we will be able to do that should get us there,” said Sen. Berger.
While the state is in a position to increase spending, Berger said he didn’t want the General Assembly to commit to spending money now that the state may not be able to afford several years from now.
He said both chambers had agreed that enough money should go into the Rainy Day Fund so that it reaches at least $2.5 billion. It currently stands at nearly $1.2 billion.
He and Moore said a budget that passes the legislature will include “significant” tax cuts though they haven’t said precisely on what they’ve agreed.
The two will not include Medicaid expansion in the budget or a bond to fund various projects, which voters would have to approve.
“I’m one of the biggest proponents of the bond in this building. We’ve talked about $2 to $3 billion bonds. Look, we’ve got $6 to $7 billion in actual cash right now,” said Moore.
They agreed to include at least $4.2 billion in new spending for the State Capital and Infrastructure Fund. They noted the nonpartisan Fiscal Research Division estimates revenues will total $27.4 billion next year.
Democrats expressed concerns that the increase in spending proposed by Republicans still won’t meet the state’s needs.
“Right now, in this once-in-a-generation opportunity to invest in public education, invest in affordable health care, invest in our crumbling roads, the Republican budget doesn’t have enough money to do that,” said Sen. Wiley Nickel (D-Wake). “What they do instead is they’re going to give more money to out-of-state corporations and to the super wealthy in tax breaks. Those are the wrong priorities for North Carolina.”
It’s unclear how Republicans in the legislature plan to resolve their differences with Gov. Roy Cooper over the spending amount and any details of the budget that have yet to be seen.
Two years ago, raises for teachers and the expansion of Medicaid were the two main sticking points where the two sides never found agreement and ultimately never passed a budget. Instead, the legislature passed a series of so-called “mini-budgets” that funded particular parts of government and included raises for some employees.
“If there are going to be real differences on spending and tax cuts, then we very well may be back in the same position as we were two years ago, which means there’d be no budget,” said Sen. Jay Chaudhuri (D-Wake). “I think at the end of the day, it’s really about what our priorities are. And, oftentimes those priorities will have to be determined at the next election.”