The N.C. General Assembly has given
final approval to a $17.2 billion spending plan for 2005-06 after weeks
of negotiations between the House and Senate. Supporters of the budget
stated that the bill provides much-needed funding for education, health
care and public safety, all of which are vitally important to improving
our state’s economy and creating new jobs. The House gave its initial
approval of the budget on Tuesday night by a vote of 60-59 and final
approval on Wednesday afternoon by a vote of 61-59, with all Republicans
voting against the bill. The Senate approved the bill on Wednesday along
party lines, 28-20, and again on Thursday. Governor Mike Easley is
expected to sign the budget into law on Thursday.
The final budget agreement provides much-needed
funding for our state’s K-12 schools, community colleges and
universities and restores Medicaid and public safety cuts that were
included in the original Senate budget, which was passed in May, but not
included in the House budget. This week’s passage of the two-year
spending plan marks the end of the budget process in the legislature,
which began several months ago. The Legislature must still complete work
on numerous other pieces of legislation before adjourning for the year,
which could occur in the next week or two. up
Highlights of the spending plan
include:
· Education:
The budget provides $9.48 billion for education, which is a 2.73%
or $250 million increase over last year’s education budget. The
budget funds education at our state’s K-12 schools, community colleges
and universities, including additional funding to cover the more than
35,000 new students who will show up at our schools in a few weeks for
the new school year. Legislators dedicated close
to $80 million to address the on-going Leandro school funding lawsuit,
which will dedicate additional funding to low wealth schools districts,
disadvantaged students, high school reforms, school-based family support
teams, and teacher recruitment. The budget provides $100 million
for ABC bonuses for teachers, in addition to a pay raise of
approximately 2.24%, and fully funds teacher assistant positions. More
than $3.2 million is provided to expand Governor Mike
Easley’s "Learn and Earn" program, which allows students the opportunity
to graduate with a high school diploma and a college degree after just
five years of study. And, with passage of the
lottery bill, North Carolina
will have even more funding to invest in school construction, early
childhood education, and college scholarships. up
· Health
Care: The budget provides more than $4
billion in funding for health care for our state’s children, blind,
disabled and elderly, and restores many of the previously proposed cuts
in the original Senate budget. Legislators provided funding to ensure
65,000 aged, blind and disabled North Carolinians and 30,000 children
will continue to be covered by Medicaid. Children ages 0-5 currently
covered by Health Choice will be moved to Medicaid, which will bring the
total projected enrollment to approximately 200,000 children over the
next three years. The North Carolina Senior Care prescription drug
program, which currently covers 120,000 seniors, will receive $10
million. Approximately 3,200 additional children will be enrolled in the
state’s More at Four pre-kindergarten program. The budget also
includes $10 million for the Mental Health Trust Fund and slightly more
than $981,000 to hire new inspectors in order to comply with the new
requirement that all group homes across the state must be inspected
annually. up
· Teacher
& State Employee Raises & Benefits:
Public school teachers will receive an average 2.24% salary increase.
The budget also sets aside additional funding that could be used by the
Governor, after consultation with the Legislature, to raise teacher
salaries closer to the national average. Community college faculty and
professional staff would receive an additional 2% pay raise. State
employees will receive a pay raise of 2% or $850, whichever is greater,
and an additional week of paid vacation. Legislators also raised the
minimum wage requirement for all state employees to at least $20,112.
up
· Economic
Development Initiatives: The budget makes
numerous investments in job creation efforts and provides much-needed
funding for programs that help attract new jobs to North Carolina,
including: 1) $4.5 million in additional funds for the Job Development
Investment Grant (JDIG) program, which since 2003 has helped create more
than 10,000 new jobs and $1.9 billion in investment; 2) $6 million for
the One North Carolina Fund, which since 2001 has helped create more
than 17,000 new jobs and $2 billion in investment; and 3) $20 million
for the North Carolina Rural Center, which has helped create thousands
of new jobs in rural communities and update water systems. The budget
also includes $9 million for the Wilmington and Morehead City ports, $1
million in new funds for community college Small Business Centers, and
$2.65 million for customized industry training, which will help
employees and companies remain competitive in an ever-changing economy.
up
· Local Programs:
The budget also included funding for several important programs. Rep.
Lucy Allen said that District 49 citizens would receive tremendous
benefits from the $7.5 million included in the budget for the Advanced
Vehicle Research Center planned for Northampton County. Many jobs will
be created by the center and related industries that will locate in
adjoining counties.
In addition, the budget directs $4 million to the Kerr-Tar Hub, which
will likewise benefit the counties of Franklin, Granville, Vance and
Warren. The budget also included funding for promotion of the new music
theatre and entertainment district in Roanoke Rapids; and smaller
programs such as the Louisburg Bike Path, the Haliwa-Saponi Community
Center in Warren County, and the Bridge Builders for Change, an
intervention program for at-risk juvenile males.
up
· Justice
and Public Safety:
The budget provides more than $1.7 billion in funding for public
safety programs including efforts to reduce gang violence, meth labs and
internet/computer security crimes across our state, and additional
funding for our state’s SBI crime lab’s ability to effectively
process DNA evidence and keep track of the evidence in the state’s DNA
database. up
· Lottery:
The House approved a separate lottery bill in April, in order to create the numbers game in
North Carolina. The budget made several changes to the way future
lottery proceeds would be used to fund education programs in our state,
including:
o 5% of revenues off the top would be
placed in the "Education Lottery Reserve Fund," which
could be tapped if lottery profits do not meet expectations in a bad
year. The reserve would be capped at $50 million.
o Of the remaining funds: 50% would go
toward early childhood initiatives (More at Four pre-kindergarten
program; class-size reduction, Leandro/low-wealth school districts);
40% would be used for public school construction; and the remaining
10% for scholarships for financially needy community college and
university students. The school construction funds would be
allocated in the following way – 65% according to ADM and 35% to
counties that have property taxes that exceed the state average (see
chart for county funding levels). Any "overage" in the
expected annual lottery proceeds would be split evenly between
scholarships and school construction.
Advertising would be extremely limited, with a cap on advertising
of 1% or less of total proceeds, and ads could not target minors or
specific groups, must include resources for responsible gaming, and
must mention the odds of winning. According to the National Conference
of State Legislatures (NCSL), North Carolina would have the strictest
lottery advertising restrictions in the nation.
The Lottery Commission would also be required to provide
information to the public about gambling addiction and treatment and
would have $1 million per year for such addiction education and
treatment. up
· Revenue:
Legislators had hoped that the economy would recover so the temporary
taxes that were passed in 2001 at the height of the recession and job
losses could be reduced this year; however, budget writers argued that
they could not cut approximately $500 million out of education or
health care programs to pay for such a tax cut this year. Therefore,
the budget continues the current half cent sales tax and tax on the
wealthiest individuals in our state who make over $120,000 per year.
The cigarette tax will increase from its current level of 5 cents,
which is the lowest in the nation, to 35 cents per pack by next
July. This would occur in two phases: the tax would increase by
25 cents on September 1, 2005 and by another 5 cents on July 1, 2006.
This increase represents a compromise between the House and Senate
budget proposals on the cigarette tax and is much less than the
Governor's request for a 45-cent increase.
Candy, satellite, telephone, satellite radio, and liquor will be
taxed at 7%, as part of the effort to be able to collect Internet
sales taxes owed, but not collected. (Liquor is currently taxed at 6%,
satellite at 5%, phone service at 6%, and candy was previously
exempted.) Cable will be taxed at 7%, with a credit for local
franchise tax paid (5%). The entertainment/movie tax will remain
the same and not increase. The tax on HMOs will increase to 1.9% in an
effort to equalize similar taxes. The budget also
includes a tax credit for film companies in an effort to increase the
number of films, televisions shows and commercials shot in North
Carolina. up
|
