RALEIGH (AP) — Republican legislative leaders in North Carolina on Tuesday unveiled state budget adjustments for the coming year, proposing to spend or set aside billions in expected additional tax revenue to raise the wages of workers, hire businesses, build more infrastructure and fight inflation.
The legislation, who will be voted on later this week before heading to the office of Democratic Gov. Roy Cooper, s spends $27.9 billion in second year of two-year budget which was already enacted last November. The changes reflect expectations that state coffers will receive $6.2 billion more than projected earlier in the current fiscal year and the new year, which begins Friday.
Missing from the legislative agreement are additional tax cuts beyond the income tax cuts already set in motion when the two-year budget was signed by Cooper. Republicans in both houses had spoken publicly for weeks about considering more tax relief for citizens struggling with inflation and other economic pressures. But they ultimately decided not to.
“This is the budget we have … this is the right budget for North Carolina right now,” Senate Leader Phil Berger said at a Legislative Building press conference. “Some things got picked up, some didn’t.”
Berger and House Speaker Tim Moore described the plan as a bulwark against what they see as a coming recession and inflation that has driven up the prices of government projects and eroded purchasing power. The bill sets aside an additional $1 billion for a new “stabilization and inflation reserve” and builds the state’s rainy day reserve to a record $4.75 billion.
“We’re going to run a government as much as possible like a business,” Moore added. “We are going to live within our means. We’re not going to spend too much. We will not overcharge.
The proposal doesn’t spend as much as the $29.3 billion Cooper wanted to spend in his budget he released in May, but it still places $7.7 billion in various reserves. The salary increases are not as high as Cooper wanted.
The legislative plan would increase next year’s 2.5% raise for state employees already in place to 3.5%, while average salary increases for teachers for the coming school year would rise from about 2.5% to 4.2%, with first-year teachers seeing a base salary of $37,000.
Unlike other measures, the adjustments are contained in a bill that cannot be changed until votes from the upper or lower floor later this week. Republican leaders negotiated them privately, but spoke with Cooper before their release.
A spokesperson for Cooper said the governor would review the full proposal. Berger said GOP leaders haven’t received any commitments from Cooper, but “we really hope and expect him to sign it or make it law.”
The budget stakes aren’t as high this year as Cooper signed the two-year budget, which can still be used to run state government at the start of the next fiscal year if the governor has to veto the measure and that Republicans don’t have the votes for a waiver.
The budget deal does not contain provisions to expand Medicaid to hundreds of thousands of additional low-income residents through the Affordable Care Act of 2010. But the issue is not on the table in the final days of this year’s session.
The House overwhelmingly passed legislation on Tuesday night which would order the Cooper administration to draw up an expansion plan by mid-December – after which lawmakers would vote for all or part of it. The measure says the expansion plan must meet at least eight designated tax and healthcare benchmarks.
“The beauty of this plan is that we’ve given the safeguards and the parameters…and when they bring this plan back to us, we’ll act on it,” Moore said before the legislation passed by a vote of 102-6. .
The Senate approved separate legislation earlier this month that would accept the expansion immediately but also include several other changes to nursing licensure and hospital construction.
Berger would not comment on the House expansion proposal during the budget press conference, saying it had not yet made it to his chamber. In a tweet, Cooper said he was encouraged that both chambers “agree that North Carolina needs to expand Medicaid. It’s imperative that agreement be reached to get this done now.”
The GOP budget deal also includes $883 million for water and wastewater infrastructure projects; $876 million for economic development; an additional $71 million for school safety and resource officer grants and funds; and $300 million for the renovation or creation of new state government buildings in downtown Raleigh, including one for the governor’s offices.