NC lawmakers announce ‘starting point’ for a budget deal, after a year of negotiations :: WRAL.com
North Carolina lawmakers have reached a deal on the broad strokes of a comprehensive state budget, ending a yearlong standoff over state spending priorities. The agreement includes raises for all state employees, including sizable bumps for teachers and law enforcement officers.
Legislative leaders announced the deal Tuesday at a joint press conference in the state legislative building. The news comes less than 24 hours after WRAL reported, exclusively, that the House and Senate were nearing a deal.
Under the agreement, all state employees would receive raises of at least 3%, plus possible bonuses based on experience and pay level. Teachers would receive averages of about 8%, plus possible bonuses. State law enforcement officers, prison workers, probation and parole officers and others would also be in line for larger raises.
The chambers were also in agreement on taxes, another key sticking point. Income tax cuts won’t go into place as aggressively as fiscal conservatives in the Senate had wanted. But, as part of the deal, both chambers have agreed in principle to put two anti-tax constitutional amendments on the ballot in November. One is the property tax reform House Republicans could vote to approve as soon as this week. The other would prevent any future state legislature from raising income taxes above their current level of 3.99%.
Other details of the deal were expected to be released in the coming weeks.
“This is a starting point,” Senate leader Phil Berger, R-Rockingham, told reporters Tuesday. “There’s still a lot that will need to be decided and discussed between the two chambers. But this agreement sets out a good framework for us to move forward.”
State employee raises and tax rates have been a major sticking point in negotiations over the broader spending plan, and an agreement on raises was seen as a major hurdle cleared on the way to a full budget, people familiar with the negotiations told WRAL News.
In budget proposals passed last year, GOP leaders in the chambers agreed broadly that they wanted to cut taxes and give state workers raises. Each chamber also proposed eliminating vacant state jobs, raising public university tuition and cutting tens of millions of dollars from public universities to help fund their other priorities. But in those proposals, leaders disagreed over the level of all of those items, and more.
WRAL first reported details of the negotiations over raises on Monday. And before lawmakers released the finalized plans, Democratic leaders and advocates for state employees had begun to grumble about the deal.
Ardis Watkins, executive director of the State Employees Association of North Carolina, said early Tuesday that the proposed increases, if they come to fruition, would likely disappoint state employees because they aren’t enough to keep up with rising costs.
She also warned that it could lead to more turnover in state agencies, which she predicts would lead to higher recruiting costs for the state. “It’s a cycle,” Watkins told WRAL before the deal had been officially announced. “It’s not fiscally responsible. It’s not saving any taxpayer money.”
Inflation climbed to 3.8% in April, the Bureau of Labor Statistics reported Tuesday.
House Minority Leader Robert Reives, D-Chatham, also criticized the proposed raise levels, citing rising inflation and increased health care costs for state employees.
“Any pay raise that falls below inflation and the increased cost of the State Health Plan will effectively be a pay cut for employees who serve our state,” Reiieves said.
North Carolina is the only state in the country without a new budget. The leaders of the two chambers last week indicated talks on a full budget were actively underway and that the two sides had been getting closer.
If the budget agreement passes both houses of the General Assembly, it would then go to Democratic Gov. Josh Stein, who can pass, veto or let the bill become law without his signature. If he were to veto the deal, Republicans would need help to override it; the Senate has a veto-proof majority, but the House is one seat shy of a supermajority.
Stein has laid out his own budget priorities — including substantial teacher pay raises that he’d pay for by slashing funding for a key GOP priority, private school tuition vouchers.
The legislature already reached a deal to fully fund the state’s Medicaid program, in near-unanimous votes last month. That program had been among the casualties of not having a new budget.
In North Carolina, unlike in the federal government, there’s no government shutdown when a budget fails to pass. Instead, state programs continue operating at old levels of approved spending — which has caused some issues in a fast-growing state like North Carolina.
— WRAL state government reporter Paul Specht and WRAL state government editor Jack Hagel contributed to this report.
