How to Spend $23 Billion: Part Two

By John Ager

The 2017-2019 North Carolina budget, after compromise, has now passed the House and the Senate. Known as Senate Bill 257, it will be sent to Governor Cooper and no doubt vetoed. Then it will come back to the General Assembly and the veto will be overridden. At that point SB 257 will become the law of North Carolina, all $23 billion worth of it.

As this legislator sees it, the budget is a blueprint for the priorities of the majority (Republican) leadership. Like most legislators, I spent many hours trying to read through it. My democratic caucus spent three more hours hitting the high points with members of the fiscal research staff. I had a pet project or two I was interested in, and glad to see in the budget. First of all, there was $200,000 for the Hemlock Restoration project. That program has made some real progress in slowing down the hemlock adelgid that has decimated our forests in the mountains. Second, the Hickory Nut Gorge Trail system, part of which is on our farm, was officially designated a State of North Carolina Trail. That will help greatly as we fund-raise to complete more miles of trail. It includes the Trombatore and Bearwallow Trails and other trails in the vicinity of Chimney Rock State Park.

Other local projects are as follows. The number of medical school students trained at the Mountain Area Health Education Center in Asheville will increase at a cost of $15.6 million over two years. Buildings at the former JEC (Juvenile Evaluation Center) in Swannanoa will be renovated to provide a lockup for women (a CRV — Confinement Response to Violation) who have served time but violated the terms of their probation. NC Highway 208 in Madison County will be widened at a cost of $3.5 million; it is unusual for a highway project to appear in the budget, bypassing the priority stipulations of the Department of Transportation. The non-profit educational program Muddy Sneakers will once again receive $500,000 to take our school kids out into the woods for hands-on learning. Four million dollars have been earmarked for the Asheville Regional Airport, for capital improvements and debt retirement. And finally, the Setzer Fish Hatchery near Brevard will be renovated.

The budget delivers $530 million in tax cuts on top of other tax cuts in past budgets, and who does not like tax cuts? The income tax “standard deduction” will be raised from $17,500 to $20,000 for married couples, shielding that amount from taxation for all taxpayers who do not itemize. The state tax rate will be reduced from 5.499% to 5.25%, and the corporate tax rate will go from 3% to 2.5%. These rates will go into effect for the 2019 tax year. The loss of revenue will magnify out over the following years, hitting approximately $1.078 billion by 2020. Cam Newton will save $59,000, the rest of us not so much. Whether or not these cuts are prudent or fiscally sound for a state enjoying population growth is a major point of discussion between the political parties here in Raleigh.

North Carolina teachers, their salaries still lagging in national averages, will receive an average raise of 3.3% for 2017/18 and a total of 9.6% over the biennium. Principals’ salaries, currently ranked 50th in the nation, will be targeted with larger increases in this budget. There are some bonuses built in for veteran teachers and elementary teachers whose students score well on reading and math tests; they will not, however, receive a tax credit the governor had in his budget that would cover the cost of classroom supplies, which they will continue to have to pay for out of their personal funds. Finally, state employees (not including legislators!) will receive a $1,000 pay raise and retired state employees a 1% cost of living adjustment (COLA).

One disturbing trend in this budget is the large number of “special projects,” more commonly called “pork.” Rockingham County (Sen. Berger) and Cleveland County (Speaker Moore) are conspicuously rewarded. There are pages and pages of these items in this budget, often doled out to powerful Republicans. Sometimes, Democrats are offered a deal for their yes vote on the budget. And yes, the Democrats doled out the pork when they were in charge as well. But this budget is larded way beyond the normal bounds, and these expenditures did not appear in any of the earlier budgets, either House or Senate. Minority Leader Jackson said, “You’re the Golden State Warriors of pork…” As for me, I do not think these expenditures are necessary, and while political people can go home to their districts to crow about “bringing home the bacon” (a pork product!), I would expect and demand more discipline if I were in charge of the process. The North Carolina General Assembly has low approval ratings, and pork spending is part of the reason. As I said on the House floor, “Mr. Speaker, I cannot support a budget that treats the North Carolina taxpayer with such disdain.”

There were a few other disappointments for me, which I would label as unnecessary political spite. The Department of Environmental Quality budget was slashed, even as the state is struggling with a new chemical discharge in the Cape Fear River. More to the politics, Governor Cooper’s budget was cut by almost $1 million a year, and Attorney General Josh Stein (also an elected Democrat) lost $10 million in his budget! He will be forced to fire 130 employees who fight fraud and abuse in North Carolina.

Thank you for taking this short and incomplete tour of our budget, and once again I feel honored to serve my beloved Fairview community.

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

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