| Legislative
Bulletin |
JUNE
29, 2001 |
 |
See a line-by-line summary of the House budget
For comparison, see the
spending plan adopted by the Senate
No tax
hikes in House budget
that raises state spending by 3.4%
The
House on Thursday approved a $14.4 billion budget that
contains no new taxes but cuts deeper than the Senate into
university funding and restores some funding cut by the Senate
for human service programs. The Senate quickly rejected the
House’s spending plan, and conferees were appointed to work
out the differences. With no budget in place by the start of
the state’s fiscal year on July 1, the legislature had to
adopt a continuing resolution that will continue funding state
agencies at current levels on a temporary basis.
House members spent five hours Wednesday debating 13
amendments and amending the budget advanced by the
Appropriations Committee five times before approving it on a
second-reading vote of 91-29. The final vote Thursday on the
budget bill was 91-27. The proposed budget increases state
spending by 3.4 percent next year, one of the smallest
increases in nearly a decade. Most of the extra spending –
about $400 million – is taken up by higher Medicaid costs.
The major difference between the House spending plan and the
Senate’s proposed budget is that the Senate favors tax
increases and loophole closings coupled with deep cuts in
human service programs to close the revenue gap while the
House accomplished the same task by shifting some funds and
dipping into reserves, including taking $150 million from the
Hurricane Floyd relief fund. Also, the House plans to generate
$170 million in extra revenue by adding more Revenue
Department employees to more aggressively collect back taxes,
and speeding up payments of taxes from businesses. The House
wants to spend $12 million less on education than the Senate
and eliminate 140 jobs from the university system, compared to
the Senate's 56.
The House wants to give teachers received a 2.86 percent raise
and a $625 salary increase to most other state workers.
Community college teachers would receive an extra 1.25 percent
pay raise on top of the $625 lump sum increase. The House
initially planned to raise tuition at UNC System campuses by 9
percent, which, along with increase in community colleges
tuition, would generate an additional $31.6 million next year.
The Senate's budget calls for students to pay $34.9 million
more in tuition. However, during floor debate Thursday, the
House by a vote of 66-50 amended its plan to lump all of the
tuition increase on out-of-state students.
Community Colleges President Martin Lancaster praised the
House for its action. The House budget cuts community college
funding by about $2.5 million whereas the Senate cut it by
about $5 million. “We sincerely appreciate their recognition
of the salary crisis which is upon us by including additional
funding for instructors and professional staff,” Lancaster
said. The House budget includes $6.9 million to start the
process of bringing faculty and professional staff salaries
more in line with the national average. The budge also
includes $3 million for student institutional and academic
support, the first funding increase in that program in years.
”In a tight year this is a wonderful budget for community
colleges,” Lancaster added.
Of the five amendments adopted during House floor debate on
the budget bill, the most controversial was a proposal by Rep.
Mickey Michaux (D-Durham) to take $2.4 million from UNC-Chapel
Hill’s overhead receipts from federal grants and $717,953
from N.C. State's overhead receipts for the next two years.
The money would be split among seven smaller university
campuses (NC Central, Elizabeth City State, Fayetteville
State, NC A&T, UNC-Pembroke, Western Carolina and Winston
Salem State) to prepare for enrollment growth. The House had
considered taking the UNC System’s entire reserve fund of
$98 million in overhead receipts from federal grants but ended
up appropriating only the $2.4 million.
The House restores funding for schools for the deaf in
Morganton and Wilson, for Dorothea Dix Hospital in Raleigh and
other mental health and retardation programs. The Senate
budget would force the closing of those facilities.
Unlike the Senate, the
House provides $6.5 million for Gov. Mike Easley's “More at
Four” pre-kindergarten program. The House session was
recessed for about two hours as House leaders struggled to
regroup after an amendment took thge money out of the
governor’s project. After reconvening, another amendment
passed to restore the program by taking $6.4 million from a
fund for child support collections receipts.
Minority Leader Leo Daughtry (R-Johnston) first lost and then
won a budget amendment to increase the cap on the number of
charter schools by 25. Earlier in the week, House
Appropriations, which favorably reported the budget document
after considering it for close to 24 hours over two days,
removed a budget provision directing local school districts to
provide special needs assistance to pregnant girls.
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