Is this the best budget our lawmakers could come up with?

It took more than a year for our legislators to agree to a state budget. The holdup can be attributed to three primary issues: pay raises, tax cuts and funding for a children’s hospital. Looking at the final 634-page document one must ask why this couldn’t have been agreed upon a year ago?

In essence, it is a ho-hum budget that isn’t going to thrill much of anyone. Let’s begin with the hold-out issues, starting with pay raises.

In the time since the last budget was passed inflation has increased by 5.33%, so the 3% state employee pay increase is not just unsatisfactory but a downright insult to our 80,000 state employees. Lawmakers tried to ameliorate some ill will by offering an additional one-time bonus, but it won’t help much. Ardis Watkins, head of the State Employees Association said, “Legislators love to tell us how well North Carolina’s economy is doing, but this budget looks like the work of a state that’s struggling.” 

Teachers get an average of an 8% pay increase, however veteran teachers, arguably our best, will receive less than that amount. Budget writers are bragging about starting teacher pay of $48,000, but don’t get excited. It takes about that much to entice people to teach.

And employee State Health Plan premiums have already increased and promise to escalate more, even with a boost of millions from the budget.

The budget cuts hundreds of jobs from the state payroll. Most of these positions are vacant, largely because agencies are trying to economize and state salaries are so low that agencies have trouble filling them.

Perhaps the most preposterous item in the budget is the funding of $208.5 million for a new children’s hospital in Apex, Senate President Pro Tem Phil Berger’s pet project that will no doubt be named after him. Never mind that our state already has 5 children’s hospitals or that the live birth rate in our state has declined between 18 to 33 percent, according to Carolina Journal. We’re going to invest over $400 million dollars where there is inadequate demonstrated need.

If North Carolina was going to spend significant dollars building a new hospital it should be a hospital for older folks! They are growing at significantly faster percentages than are younger people and are projected to reach 3 million. In 88 of our 100 counties people over 60 outnumber those under 18.

The third big budget holdup was tax cuts; the House wanted to delay further personal income tax cuts after authoritative sources predicted a potential budget shortfall if cuts continue. The House obviously lost the argument because tax rates will drop from 3.99 to 3.49% in fiscal years ’27-‘29, 3.2% in ‘30-’32, and 2.99% in ‘33-‘34.

Here are other highlights:

The budget removes much of the antiquated certificate of need rules and regulations in our state, which should open healthcare competition.

Gamblers will see gross wagering fees increase from 18 to 23 percent and losers will be able to deduct some of their losses on income tax returns. Gambling revenue proceeds distributed to our state-supported universities will now include UNC Chapel Hill and NC State, our two largest universities. Both had been previously excluded from sharing the pot.

The budget adds $450 million to the Rainy-Day Fund, increasing that amount to $4.2 billion.

We will continue to give $675 million to private schools, with no major concerted effort to improve traditional public schools, other than taking $35.8 million saved from per pupil appropriations and reinvesting the funds in math, literary and personnel development, along with $30 million for advanced teaching roles salaries.

If the EPA approves North Carolina will eliminate vehicle emissions testing.

The huge problems encountered at DMV offices around the state are unlikely to diminish even with token fund increases and 30 new driver’s license examiners. There is language about doing away with registration cards and annual inspection stickers but little explanation how that will happen.

With the state’s rapid population growth, the increased traffic on our highways is outpacing state funding and the budget gives money (albeit not enough) for road maintenance.

All passengers on our ferries will now pay tolls.

Some good news is the Medicaid will be fully funded and funds will be provided to help meet SNAP costs.

In summary: This budget agreement took too long and accomplished too little. Most worrisome is it was agreed upon behind closed doors and our 170 legislators had no opportunity to amend or revise it in floor debate. Instead, they were faced with an up or down vote to approve it.

Governor Stein will no doubt sign the budget into law. As late as it is and as unsatisfactory as a lot of this budget is the Governor has little choice but to approve it.

Tom Campbell is a Hall of Fame North Carolina broadcaster and columnist who has covered North Carolina public policy issues since 1965.  Contact him at tomcamp@ncspin.com