How to Budget $23 Billion

by John Ager

The 2017 Long Session of the General Assembly may not be quite as long as it was two years ago. That session ended October 1st after a protracted budget battle between the House and the Senate. This go-around, the Senate passed their budget at 3 am Friday, May 12. As you read this, I would hope that the House budget will have been finalized and the reconciliation process between the two bodies in full swing. The Governor begins the process by setting out his budget in March. Legislators also hear from the budget staff about how the actual revenues are coming in. Remember, North Carolina’s budget year starts July 1.

There are appropriation sub-committees that meet, each with responsibility over certain areas of the budget. This year I served on two of these committees: General Government (funding many state agencies such as the Departments of Revenue, Audit, and Treasury); and Agriculture and Natural and Economic Resources (Departments of Agriculture, Environmental Quality and Commerce). These sub-committees recommend the budget amounts for their areas to the larger Appropriations Committee.

The first budget always comes from the Governor’s office. I was partial to that budget. It did not raise taxes. It supported increased spending for education at all levels, from early childhood to our universities. Teacher pay was set on track to lead the Southeast in three years, after lagging since the beginning of the recession. There was a special emphasis on school principal pay. Our state was 50th, and administrators were leaving for other states. Governor Cooper also wanted to expand Medicaid, which would provide health coverage for about half a million of our citizens. Health providers have been clamoring for this policy decision. His budget also included extra funds for transportation projects, road maintenance, and job-ready sites to attract industry in rural areas. There would also have been a 2% raise for state employees and a 1.5% Cost of Living Adjustment (COLA) for retirees. Tax credits for movies made in North Carolina would be restored.

The Senate and the House take turns as to which presents the first budget, and this year it was the Senate’s turn to go first. When their budget was completed, a press conference was called and the printing office in the legislative building began the task by creating huge budget documents. Legislators, interest groups, and journalists pore over the numbers, then the Senate votes, and the budget is sent to the House. Votes must be taken on two successive days. The decision was made to vote once on a Thursday, then after midnight on Friday. You and I might agree that late night legislation should be discouraged.

Senate Democrats wanted to propose amendments to highlight their policy priorities, even though they knew they would be opposed by Republicans and wouldn’t pass. One amendment would cap income tax reduction for those earning over $1 million a year, and use the money to mitigate the opioid crisis. That bill was more than the GOP could stand, and they called for a recess until 3 am. The GOP then introduced an amendment that pulled funds for special education projects in Democratic districts and added $1.3 million to the budget for opioid funds. The budget then passed the Senate.

More Senate Budget and Policy Gems

1) An increase in teacher pay, although more modest (by about half) than our governor’s amount;

2) No COLA allowance for state retirees;

3) A provision that would reduce by about 133,000 (including 51,000 children) those eligible for SNAP (food stamp) assistance (SNAP is a federal program and does not actually affect our state budget); and

4) Further reductions in state income and corporate tax rates. Those million-dollars-a-year citizens would save $3,600/year while middle-class families save about $60/year. Remember, there’s is a lot of “gamesmanship” in the budget, and the Senate may have low-balled many items as a bargaining chip with the House.

Beyond the budget, there are two other important legislative items. The first involves voting districts for the state Senate and House. There was a lawsuit the Fourth Circuit Court ruled on early this year, concluding that 30 of these districts were tailored with “surgical precision” to disenfranchise minority voters, and thus the changes that were made were ruled to be unconstitutional. The court actually ordered new districts to be drawn by March 15, and special elections to be held in 2017. The case was appealed to the US Supreme Court, which recently agreed (unanimously) not to hear the case. Chief Justice Roberts made it clear that their decision was not a reflection on the “merits of the case.” However, it does mean that the judgment of the fourth circuit stands. Barring a surprise legal decision, the 2017 special elections will not now be held.

The second legislative item concerns a bill to “Raise the Age.” North Carolina now remains the only state that allows 16 and 17 year olds to be tried as adults. On May 17 the House voted, with only eight dissenting votes, to try most of this population in Juvenile Court. Since Juvenile Court provides more services for its offenders, there are some up-front costs involved. However, other states have shown these services reduce recidivism rates. This vote should save our state millions in incarceration expenses over the long run.

As always, I am grateful for the opportunity to serve you in Raleigh.

Rep. John Ager, District 115 North Carolina House of Representatives

Leave a Reply