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NC Budget and Tax Center

North Carolina Senate and House budget writers met today in a rare public meeting to break the budget logjam and iron out a final budget deal for the 2015 fiscal year (FY)—which began yesterday. Because lawmakers approved a two-year budget last year as part of the biennial budgeting process, vital public services and programs are continuing but at modified levels per the Governor’s budget directive.

Leaving the budget for FY2015 in place is an option but it’s a bad option. Spending for Medicaid would be far below what’s needed under the already-approved budget due to enrollment and claims backlogs as well as the Medicaid rebase. The budget also fails to include other election-year priorities such as much-needed pay raises for state employees and teachers.

The Senate and House all put forward budget proposals that use wildly different estimates on items that should be fairly consistent across budget proposals. Before moving on to sub-committee negotiations where the full budget differences will be hashed out, budget writers’ goal for the meeting today was to seek harmony on a final budget estimate for three basic areas: 1) agency reversions; 2) the Medicaid shortfall and rebase; and 3) lottery revenues. Doing so allows budget writers to know how much money is available on the spending side. Lawmakers walked away with an agreement on estimates for agency reversions and Medicaid estimates but not on the lottery revenues. Read More

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On the first day of a new fiscal year, it appears state Senators are in no rush to wrap-up budget negotiations with the NC House.

On Monday, the Senate rejected the House “mini-budget” that has the blessing of Governor Pat McCrory.  Senate President Pro Tem Phil Berger made it clear that without a more accurate assessment of Medicaid costs, his chamber was not prepared to make other budgetary decisions.

And with political observers now projecting the “short” session will last most of July, advocates are urging lawmakers to take time and reconsider restoring the state Earned Income Tax Credit.

The NC Budget and Tax Center calls the state EITC ‘a highly effective anti-poverty tool‘ with lasting, positive effects on children and low-income working families.

House Minority leader Rep. Larry D. Hall discussed the need to restore North Carolina’s EITC when he appeared last weekend on NC Policy Watch’s weekly radio show News & Views with Chris Fitzsimon. Click below to hear Rep. Hall’s remarks:

YouTube Preview Image Nearly one million families in the Tar Heel state —including 64,000 military families— benefited from the North Carolina EITC last year.

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In case you missed it, be sure to check out today’s edition of the Fitzsimon File in which Chris explains what’s really at issue in the stalemated state budget negotiations. Most notable on the list: the remarkably regressive positions of Senate President Pro Tem Phil Berger.

“Senate President Pro Tem Phil Berger told WRAL-TV that any budget deal must not only include the Senate’s estimates of Medicaid costs but must also reduce the number of people who are covered by the program.

Berger said the Senate wanted ‘reductions in the welfare spending that is ongoing at the present time.’  Medicaid, the health care safety net for the most vulnerable people in North Carolina, is now welfare in Berger’s far-right view of the world.

The budget the Senate passed earlier this session would kick at least 5,200 aged, blind and disabled people off of Medicaid. More than 1,600 of them have Alzheimer’s or dementia and are in special care units, which to Berger must be a new fancy way of saying welfare.”

As Chris also notes, there is an easy way out of the mess: Read More

NC Budget and Tax Center

In a bizarre turn of events, the House Committee on Appropriations met today to review and vote on a new spending plan for the upcoming fiscal year. The bill passed in what appears to be along partisan lines, and it heads to the House floor tomorrow. For the most part, the new spending plan leaves in place the second year (FY2015) of the two-year budget that lawmakers already approved last year. The changes are mainly geared toward moving lottery dollars into the General Fund, boosting pay for teachers and state employees, and adjusting the education budget.

See the NC Budget and Tax Center’s statement on the budget here.

The day started with Governor McCrory and Speaker Tillis holding a joint press conference at 1pm to make an education announcement. It was revealed that House leadership planned to unveil a new spending plan that doesn’t rely on raising additional lottery dollars generated from increased advertising.  What wasn’t mentioned at the press conference is that the new plan relies on more lottery dollars to finance pay raises, those dollars just aren’t generated from relaxing the advertising rules. Those dollars just happen to be the result of revised lottery projections under current rules. In other words, the budget is still relying on a source of funding that is unstable and regressive. Read More

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House Speaker Thom Tillis partnered with Gov. Pat McCrory today to announce their efforts to work together toward a teacher pay plan they characterized as responsible and affordable—but key details of the House’s new mini-budget proposal, unveiled today, remain unclear.

“We’ve been preparing plans from not inside the beltline but outside the beltline – by listening to the experts who are closest to the action, who are every day inside the classroom,” said McCrory, who was flanked by Speaker Tillis, State Board of Education Chair Bill Cobey, State Superintendent June Atkinson as well as lawmakers, school superintendents, teachers and other education advocates from around the state.

McCrory called on local superintendents and teachers to support his proposed teacher pay plan, which would work toward implementing career pathways that reward teachers for performance as well as experience and avoid cutting teacher assistants, unlike the Senate proposal which would slash TAs in the second and third grades.

Tillis followed McCrory by stepping up to the podium to announce his revised “mini-budget” that would be unveiled later in the afternoon in the House appropriations committee.

Calling it a consensus bill that people on Main Street would support, Tillis said his revised legislation would give teachers a raise but take the lottery funds off the table to do that. He would also preserve funds for teacher assistants. Read More