From teacher raises to tax cuts, here are 5 differences between NC House, Senate budgets
The North Carolina state legislature is deciding how to spend $25.7 billion in taxpayer money through the state budget. The Senate passed its proposed budget in June, and the House will pass its version this week.
Here are five big differences between the House and Senate budgets, and what that means for North Carolina:
1. Raises for teachers, state employees
Both the Senate and House budgets have bonuses for state employees using federal American Rescue Plan funds. But the bigger ticket items are the recurring funds of raises.
The Senate plan is simple: 3% across the board raise for almost all state employees, including teachers.
The House budget has more of a variety of raises. For teachers, that means an average of 5.5% over the next two years. For most other state employees, they would get a raise of 5% over two years.
The Senate has no raises for retired state employees, nor does the House budget. However the House budget proposes a 2% bonus each of the next two years for retirees.
One other major change for teachers in the House budget is the restoration of master’s degree pay as well as instilling eight weeks of paid parental leave for new mothers. Neither are in the Senate budget.
2. Pace of tax cuts
The budget is written by leaders of the Republican-controlled chambers, and they both want tax cuts. The big difference is that the Senate was bigger tax cuts now, and the House wants lower tax cuts, but with the same end goal.
“We’re all trying to get to the same place. It’s just a matter of timing,” Rep. Jason Saine, head House budget writer and a Lincolnton Republican, told reporters during a press conference on Monday.
The biggest differences in the tax plans are the income tax rates for individuals and corporations.
The House’s budget wants the individual income tax rate to be reduced from the current rate of 5.25% to 4.99%. The Senate wants the rate to go down to 3.99%.
For the corporate income tax, the Senate tax plan works to phase it out completely. The House is slower.
Rep. John Szoka said during the House Finance Committee on Monday that the House’s plan to lower it from the current 2.5% rate to 1.99% over two years would help North Carolina compete regionally for companies.
3. African Americans monument funding
The Senate budget passed in June had zero dollars allocated for the long-planned monument to African Americans on the historic State Capitol grounds. The $2.5 million has been in the works for several years and was in the 2019 budget that never became law. In that budget, it was coupled with $1.5 million for Freedom Park, a separate project that was later funded in a different bill and signed into law. The Capitol monument funding was left out in a sudden move amid the Black Lives Matter protests of 2020 that included protesters tearing down some of the Confederate soldier statues at the Capitol.
Freedom Park will be built on Lane Street, two blocks from the Capitol building.
But the monument on the Capitol grounds 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 non-recurring 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 “historic and ongoing struggles for freedom in North Carolina and especially 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 broke ground in October.
4. Cooper likes the House version better
Once the House passes its budget this week, the conference process starts, which is a few weeks or so of the House and Senate working out a budget that they can all agree on and pass. Then they send that budget to the desk of Gov. Roy Cooper, a Democrat.
While both chambers are Republican majority, they are not the supermajorities needed to override a veto. So an override 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 looks forward “to negotiating a compromise that is fair to the entire state.”
Speaking of the governor, the power of the executive branch is also a key difference in the state budgets.
5. Emergency powers
The Senate budget inserted a provision in its version that was a redo of a perennial issue during the coronavirus pandemic — emergency powers of the governor.
The Senate budget provision would change state law to require agreement from the Council of State within 10 days of the governor issuing an executive order. If that is approved, the order would then expire 45 days later unless the General Assembly takes action to extend it longer.
But that’s not exactly in the House budget, though there is a provision about emergency management. The House proposal would require documentation of Council of State concurrence on issues that require it, and within 48 hours. It does require Council of State concurrence for extending states of emergencies, like the Senate.
House Majority Leader John Bell told reporters they wanted to keep the powers issue separate. Instead, the Senate plans to take up the emergency powers bill passed earlier this session by the House.
For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at link.chtbl.com/underthedomenc or wherever you get your podcasts.
This story was originally published August 10, 2021 at 3:51 PM with the headline "From teacher raises to tax cuts, here are 5 differences between NC House, Senate budgets."
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