The North Carolina House voted on Wednesday for a Republican-backed budget measure that would fund the state government for the next two years, including billions in spending for infrastructure and mental health and attempts to address inflation and job vacancies with pay raises.
By a vote of 78-37, the chamber gave initial approval to its budget, which would spend $29.8 billion during the next fiscal year and $30.9 billion in the one after that. That contrasts with Democratic Gov. Roy Cooper’s proposed budget unveiled last month, which was panned by Republican legislative leaders for spending over $3 billion more each year.
The GOP plan “balances the needs of our citizens with the realities that we face, such as runaway inflation, supply chain shortages and a potential recession in our future,” said Rep. Donny Lambeth, a Forsyth County Republican and a top budget writer. “This is not a spend-spend reckless plan but an opportunity to build on our successes.”
Republican House and Senate leaders previously agreed to spending caps, although Senate GOP budget writers drawing up their own plan later this spring will propose different ways to spend or tax.
The Senate’s budget process formally begins after the House gives its plan one more affirmative vote on Thursday, and the two chambers ultimately will work out a final bill to present to Cooper.
House Republicans proposed raising public schoolteacher salaries on average by 10.2% over two years, short of the 18% proposed by Cooper. Rank-and-file state employees would see salary increases of more than 7.5% during the same period, with higher raises for state troopers and money to recruit and retain community college workers.
On taxes, the budget would reduce the planned individual income tax rate in 2024 from 4.6% to 4.5%. A 2021 law is already lowering it to 3.99% by 2027. The measure also would increase standard deductions by another $250 to $1,000, depending on one’s filing status. The per-child tax deduction would grow, and a new adoption tax credit would be created.
The measure sets aside $2 billion for local water and sewer project grants, and it earmarks $1 billion from the federal government for mental health treatment and $7.8 million for eliminating any outstanding K-12 school meal debt by students.
The budget also contains many unrelated changes that seek to advance GOP policy preferences. They will test the argument that Cooper will swallow policy prescriptions he opposes because a budget for the coming year must be approved if Medicaid expansion contained in a separate law he signed last week is to take effect.
That caveat within the Medicaid expansion law gives Republicans more leverage even beyond the fact that they now hold veto-proof majorities in both chambers. The GOP gained a House supermajority earlier Wednesday when Democratic Rep. Tricia Cotham of Mecklenburg County announced she was switching to the Republican Party. That didn’t affect the budget vote — nine Democrats joined all Republicans present in voting for it after roughly three hours of debate.
Cooper tweeted this week that House members “should get back to the drawing board” and propose a reworked budget. He said it needs to fully fund a court plan to address public education inequities, locate child care center funds and block for the highest wage earners an income tax cut that otherwise will automatically take effect.
House Republicans inserted provisions that would block Cooper’s effort to set standards related to new vehicle sales that would mandate sales or purchases of “zero-emission vehicles.” And the state would be barred from entering a “cap-and-trade” program for carbon dioxide emissions. The measure also would distance further from the governor’s oversight of the State Board of Investigation.
In K-12 public education, schools would have to post online teacher lesson plans for the previous year and other course material. Local school boards would be required to create “community media advisory committees” that would determine whether instruction materials are unfit as obscene or inappropriate. Republicans say the mandates are designed to improve school transparency.
Rep. Julie von Haefen, a Wake County Democrat opposing the bill, called the instructional interference “a pure distraction from the very real issues facing our public schools” like teacher shortages and classroom supply spending.
“We are playing politics with our children’s futures,” said von Haefen, a former county PTA president.