House and Senate brace for budget talks

by Matt Caulder, NC Capitol Connection, June 3, 2016.

With the state Senate giving final approval to its version of the budget shortly after midnight Friday, the stage is set for Senate and House members to come together and hammer out a budget deal to deliver to the governor before the start of the new fiscal year July 31.

Legislators hope to have the budget compromise together by July 4, giving them a little less than a month to come up with a deal.

The two plans share a lot of similarities but differ in the areas of growth in spending, tax changes and state savings, as well as adjustments to salaries and benefits of state employees and retirees.

The House budget represents a 5.1 percent increase in spending, not including automatic statutory earmarks, while the Senate budget increases spending by 1.8 percent, also not including existing earmarks.

A large part of the difference comes from the cost to give widespread raises to all state employees and also bolster the state Medicaid system.

The Senate budget is the more conservative of the two, refraining from some of the broader pay increases seen in the House budget.

The House budget includes a 2 percent cost of living adjustment for retirees as well as a 2 percent across-the-board raise for state employees, whereas the Senate budget does not.

The Senate budget, however, does include a plan to get the average teacher salary in the state up to nearly $55,000 over a two-year period.

The Senate budget includes major tax changes to increase standard deductions in the state over a two-year period to $17,500 for married couples, and also cut the corporate tax rate in the state.

The House budget funnels $200 million into the state savings fund whereas the Senate budget includes $500 million for the piggy bank to prepare for the next recession.

The House budget also includes an additional $50 million for the state Medicaid Contingency Reserve while the Senate maintains the $186 million in the fund.

The House budget provides more funds for economic development programs and “job creation” programs in the state, which was a sticking point in past budget negotiations. In the past, the House has been more apt to hand out corporate incentives than the more frugal Senate.

The House budget makes $519 million available for infrastructure while the Senate included $300 million for the repairs and renovation fund.

The Senate budget includes a section that would repeal the cap on funding for light-rail and install a limit of funding of 10 percent of the estimated total projects costs for light-rail, as it does with other public transportation projects that span two or more counties.

The previous cap on funding for light rail was $500,000.

The House budget simply repealed the cap but did not install any other restrictions.

http://nccapitolconnection.com/2016/06/03/house-and-senate-brace-for-budget-talks/