NC House vs Senate budget for increases, taxes, governor


The North Carolina State Legislature decides how to spend $ 25.7 billion of taxpayer dollars through the state budget. The Senate adopted its budget proposal in June and the House will adopt its version this week.

Here are five big differences between House and Senate budgets, and what that means for North Carolina:

1. Increases for teachers, civil servants

The Senate and House budgets provide for bonuses for state employees using federal funds from the US bailout. But the most important items are the recurring increases funds.

The Senate’s plan is simple: 3% increase for almost all government employees, including teachers.

The House budget has more than a variety of increases. For teachers, that means an average of 5.5% over the next two years. For most other government employees, they would get a 5% increase over two years.

The Senate does not have a raise for retired government employees, nor does the House budget. However, the House budget proposes a bonus of 2% each of the next two years for retirees.

Another major change for teachers in the House budget is the reinstatement of the masters salary as well as the introduction of eight weeks of paid parental leave for new mothers. Neither is in the Senate budget.

2. Pace of tax cuts

The budget is written by the leaders of the Republican-controlled chambers, and they both want tax cuts. The big difference is that the Senate had bigger tax cuts now, and the House wants smaller tax cuts, but with the same end goal.

“We are all trying to get to the same place. It’s just a matter of timing, ”Rep. Jason Saine, House Budget Editor and Republican for Lincolnton, told reporters at a press conference Monday.

The biggest differences in tax regimes are personal and corporate income tax rates.

The House budget wants the personal income tax rate reduced from the current rate of 5.25% to 4.99%. The Senate wants the rate to drop to 3.99%.

For corporate income tax, the Senate tax plan aims to eliminate it completely. The house is slower.

Representative John Szoka told the House Finance Committee on Monday that the House plan to lower the current rate from 2.5% to 1.99% over two years would help North Carolina compete businesses at the regional level.

3. Funding of African-American monuments

The Senate budget passed in June had allocated no dollars to the long-planned monument to African Americans on the historic grounds of the State Capitol. The $ 2.5 million has been in the works for several years and was included in the 2019 budget which never became law. In that budget it was associated with $ 1.5 million for Freedom Park, a separate project which was then funded in another bill and enacted. Funding for the Capitol monument was left out in a sudden move amid the 2020 Black Lives Matter protests which included protesters who demolished some of the statues of Confederate soldiers on the Capitol.

Freedom Park will be built on Lane Street, two blocks from the Capitol.

But the monument on the grounds of the Capitol is still not funded in the House budget either. What is funded is more money for the Freedom Park project. The House budget has $ 650,000 in one-time funds, described as the Freedom Monument Fund, to build the public sculpture park on the block between the Legislative Building and the Executive Mansion. The budget describes it as commemorating “the historic and continuing struggles for freedom in North Carolina and in particular the enduring roles of African Americans in the struggle for freedom in this state.”

Freedom Park is the state’s first monument to the black experience to be placed in a prominent position in the state capital. It innovated in October.

4. Cooper prefers the House version

Once the House passes its budget this week, the conference process begins, which means that within a few weeks the House and Senate come up with a budget that they can all agree on and pass. Then they send that budget to the office of Governor Roy Cooper, a Democrat.

Although both houses have a Republican majority, they do not constitute the qualified majorities necessary to override a veto. Thus, a waiver would require some Democratic support.

“The House budget is better than the bad Senate budget, but that doesn’t make it good,” Cooper said in an emailed statement to The N&O on Tuesday.

Cooper said he was eager to “negotiate a compromise that is fair for the whole state.”

Speaking of the governor, the power of the executive is also a key difference in state budgets.

5. Emergency powers

The Senate budget inserted a provision into its version that was an overhaul of a perennial problem during the coronavirus pandemic – the governor’s emergency powers.

The Senate budget arrangement would amend state law to require the consent of the Council of State within 10 days of the issuance of a decree by the governor. If approved, then the order will expire 45 days later, unless the General Assembly takes steps to extend it longer.

But it is not in the budget of the House, although there is a provision on emergency management. The House’s proposal would require documentation of the Council of State’s approval on matters that require it, within 48 hours.

House Majority Leader John Bell said they wanted to keep the issue of powers separate. Instead, the Senate plans to revert to the Emergency Powers Bill passed earlier this session by the House.

For more information on North Carolina government and politics, listen to The News & Observer and NC Insider’s Under the Dome political podcast. You can find it on or wherever you get your podcasts.

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