BTC Quick Take on the Conference Budget

The $20.2 billion conference budget released late yesterday brings together the Senate and House plans to fund state investments at 11.4 percent below pre-recession levels and at a new all-time historic low of 5.47% of state personal income.  Here are some of the key details from this budget proposal that will likely move to the floor as early as tomorrow for a vote.

K-12 Education

• Increases public education budget by a net $62.4 million in recurring funds, or about 0.8% over continuation. This doesn’t include the $85 million in reserves for LEAs to support a 1.2% salary increase.
• Partially restores the LEA adjustment by $143 million, of which $16.4 million is paid out of education lottery surplus (one-time) dollars. This line leaves the LEA Adjustment at a total of about $359.8 million, which is about $63 million less than the current year ($429 million)
• Cuts textbook funding by $4.3 million (new item)
• Includes the majority of the Excellence in Public Schools Act, appropriating $27 million in recurring dollars to fund it (Senate budget)

Community College

• Includes funds to restore part of the management flexibility reduction (5%) with the remaining $83 million to be found by the State Board of Community Colleges. (House budget)
• Includes $5 million in non-recurring dollars to support the NC Back to Work initiative (House budget)
• Eliminates the fee increase for continuing education scheduled to take effect in FY 2012-13 (House budget)

UNC System

• Funds projected enrollment increase with an addition of $1.3 million in recurring dollars (Senate budget)
• Funds the Faculty Retention and Recruitment Fund at $3 million (both Senate and House budgets)
• Increases money to UNC Need-Based Grant by $18 million from Eschaets and Lottery Fund, which is roughly half of what is needed to make up for the 2011 budget’s $35 million cut to the program

Health and Human Services

• Provides $212 million to partially fund the projected enrollment growth in the number of people eligible for Medicaid
• Anticipates $59 million in savings through Community Care of North Carolina
• Changes the eligibility criteria for personal care services and reduces appropriation by $6 million
• Provides for $10.3 million to plan to transition individuals with severe mental illness to community living arrangements and temporary assistance in the amount of $39.7 million to adult care and group homes they transition individuals to community placements (similar to House budget in total dollars, provisions similar to Senate budget)
• Takes no action to address the NC Pre-K waiting list or to restore cuts made last year

Department of Natural and Economic Resources

• Transfers significant functions to the Department of Agriculture and Consumer Services, reducing the budget by 26.6% over continuation (House and Senate budgets)

Clean Water Management Trust Fund

• Eliminates total recurring appropriation ($11.25 million) and replaces with $10.75 million in non-recurring funds. This is a 4.4% cut from continuation for the CWMTF, which before the 2011 session was funded at $100 million annually.

Commerce

• Most notable are the changes to OneNC, a $45 million transfer from OneNC to GF, leaving a $15 million balance in the Fund.  This differs from the House language, which only transferred $30 million out of the fund, the Senate, which transferred out $50 million. The money report also specifies an additional $9 million in R to be put into the Fund from reserves.
• Appropriates $5 million of this total amount for an unspecified economic development project not related to OneNC operations—this is likely for the same non-Commerce-requested land purchase that drew heat during the Senate debate.

Transportation

• Caps the gas tax at 37.5 cents for FY2012-13. The final budget drops a provision from the House budget that would require DOT to plan as if the gas tax were actually set at 35 cents instead of the current revenue forecast process.
• Directs DOT to collect tolls on all ferries in the state with three exceptions: the Hatteras–Ocracoke ferry and the Knotts Island ferry would remain exempt from tolls per current state law and the Cherry Branch/Minnesott Beach route would be toll-free for FY2012-13 only.
• Transfers $63 million in non-recurring funds from the planned Garden Parkway and Mid-Currituck Bridge toll projects—both of which will not be ready to expend the funds in FY2012-13—to the Mobility Fund. The Mobility Fund also receives a recurring $45 million appropriation.
• One new item in the transportation section is a non-recurring $2 million appropriation to supplement and advance project studies related to the Mid-Currituck Bridge project to move the project forward to construction.
• The Regional New Starts & Capital Program within the Public Transportation Division of DOT is eliminated. The unexpended balance of funds for this program ($25 million) is reallocated to the LYNX Blue Line Extension project in Charlotte. Because this program is eliminated, funding for fixed-guideway projects, commonly referred to as light rail, will compete with highway and road projects for funding from the Highway Trust Fund.
• Makes a $1.9 million recurring cut to public transportation grants, which are often used to draw down federal matching funds. This cut is smaller than the $2.6 million cut proposed by the House. The Senate proposal did not include cuts to the grant program.
• Makes no fee changes to the Drivers Education program (Senate budget)

Justice and Public Safety

• Makes mostly management flexibility cuts to the JPS agencies (Senate budget)
• Expands the Parole Commission by two full-time equivalents and eliminates the Edgecombe Youth Development Center (House budget)
• Transfers the Consumer Protection Division to receipt-support, removes Family Court from continuation review, and uses $200,000 in mortgage settlement funds to cover cuts to the Conference of District Attorneys (House and Senate budgets)

Housing Trust Fund Agency

• Eliminates $7.9 million in General Fund appropriations to the Housing Trust Fund for FY2012-13, swapping this money out with the same amount in non-recurring funds from the National Mortgage Settlement.