(The Center Square) – The North Carolina General Assembly on Wednesday approved a “historic” budget that would increase spending by more than 4% in each of the next two fiscal years.
North Carolina will spend $ 25.9 billion in the current fiscal year, an increase of 4.3% over the previous fiscal year, and $ 27 billion in 2023, an increase of 4, 1% of the proposed budget for 2022, if the draft state budget becomes law.
The budget also cuts $ 3.2 billion in taxes in the biennium and billions more years later. It allocates more money to education and increases teachers’ salaries, with a record amount for infrastructure and savings.
“This is a one-time budget in a generation,” said Rep. Donny Lambeth, R-Forsyth. “The state of North Carolina has never, ever invested more money in education. The state has never invested so much in health and social services. This state has never invested so much in infrastructure and our communities, and this state has never saved more for the future and returned more money to hard-working taxpayers and families. Everyone, everyone in the state benefits. “
The bill includes a record $ 8 billion infrastructure plan, including the addition of $ 6 billion to the State Capital and Infrastructure Fund. The proposal allocates $ 4.25 billion to the North Carolina Rainy Day Fund and an additional $ 800 million for disaster relief. It also increases K-12 basic education spending by $ 1.5 billion, pushing the budget line to nearly $ 11 billion. The state is also investing in expanding broadband, domestic violence shelters and other social services.
Under this measure, the state would reduce $ 3.5 billion in taxes for the next two years and $ 13 billion for the next five. The proposal would increase the state’s zero tax bracket from $ 21,500 to $ 25,500. It cuts the personal income tax rate from 5.25% to 3.99% by 2027, starting with 4.99% in 2022. It increases the child tax deduction by $ 500 per child and eliminates the State income tax on military pensions.
The bill also lowers the franchise tax base for corporations and phase out corporate income tax over six years, starting in 2025. It makes expenses paid with paycheck protection program loans deductible. tax.
The budget plan also uses federal funding from the American Rescue Plan Act. Lawmakers would use $ 545 million for 5% bonuses for teachers and state employees. Teachers will receive an average salary increase of 6.7% during the biennium and up to $ 2,800 in bonuses. The proposal also guarantees $ 15 an hour for non-certified staff in schools and community colleges.
The state budget proposal cleared the House, 104-10, Wednesday afternoon. The Senate approved Bill 40-8 on Tuesday and gave its final approval Wednesday morning. The conference committee’s proposal came more than four months after the start of the fiscal year on July 1. If the bill becomes law, North Carolina will be the last state to pass a budget. It would be the first budget signed by Governor Roy Cooper since taking office.
The budget bill also includes non-monetary provisions, including reducing the powers of the governor and the attorney general.
The proposal includes a provision to limit the governor’s ability to shut down the economy in an emergency. Republican lawmakers have tried three times to pass duplicate bills reflecting the provision. All attempts were unsuccessful, Cooper having vetoed two. The third bill did not receive a full vote.
Legislative leaders also inserted a provision that would require legislative leaders to sign lawsuit regulations involving the General Assembly. Cooper vetoed a bill that mirrors the provision in September, calling it “unconstitutional and reckless.”
Cooper maintained his take on the provisions on Tuesday, but said he was still committed to signing the budget bill.
Representative Marcia Morey, D-Durham, said the provisions tainted the budget and criticized Republicans for not including the Medicaid expansion in the bill. The increase in enrollment in the publicly funded health care program has also been a point of contention between Republican leaders and Cooper.
Legislative leaders have said they will consider expanding Medicaid during recent negotiations, but were unable to secure enough votes from other Republican members. The General Assembly, however, will consider ways to address access to health care and consider expanding Medicaid.
“We are voting on a policy, a policy that has nothing to do with money. It is pure policy to reduce the duties and powers of the governor during a state emergency and prevent the attorney general from doing its job to settle the lawsuits, ”said Morey, who also opposed the removal of corporate taxes. “These bills have already been vetoed, and yet we find them in this budget.”
The House is due to give final approval of the budget on Thursday before sending it to Cooper.
