NC House releases proposed state budget

$24B budget comes in under $25B projected revenue

Jason Saine speaks to reporters at the N.C. General Assembly
FILE: Jason Saine speaks to reporters at the N.C. General Assembly

RALEIGH — The North Carolina House announced Tuesday that they had completed work on the 2019-20 biennial budget. Co-chair of the House Appropriations Committee, Rep. Jason Saine (R-Lincoln), said the bill is a 3 percent increase over the 2018-19 budget, an increase of $689 million. The total is around $24 billion, a number agreed to in March with the Senate as the target for both chambers. 

The increased spending in the budget “is easily paid for by growth and the sound fiscal and tax policies we’ve worked on for a few years. This just shows that conservative policy works,” Saine told North State Journal.  

The budget bill, H.B. 966, transfers an additional $105 million to the savings reserve, often called the “rainy-day fund,” bringing the total in reserves to $1.36 billion. This fund is cited as key to responding to unforeseen crises, like natural disasters.  

H.B. 966 also funds a continuing transition of the state’s Medicaid program, which provides health care for many low-income residents, from a fee-for-service model to a managed care model. With a fee-for-service model, the state and providers often end up in long battles over pricing and billing, but many states have found success moving to a system where companies manage the care of the patients for a flat fee.  

Funding for the “Raise the Age” law passed in 2017 is made available in this budget. North Carolina was the only state to automatically prosecute 16 and 17yearolds as adults. Now funding would allow them to be housed with juveniles rather than adults and to be charged in juvenile courts.  

The new State Capital and Infrastructure Fund, known as SCIF, will receive 4 percent, or $953 million, from the state’s general fund tax revenue, and $249 million from other sources. This fund will be a pay-as-you-go account to fund additional infrastructure as North Carolina grows in population and seeks to upgrade old roads, bridges and other public construction without incurring new debt. 

For the education portion of the budget, often the most carefully scrutinized, the House allocated $14 billion for 2019-20 and $14.3 billion in 2020-21, an increase of $270 million over the prior biennium. Much of this funding focused on job readiness, like money for workforce development at community colleges, $2.8 million for career coaches at high schools and funding for job training in the state’s prisons.  

During a press conference announcing the budget, House Speaker Tim Moore (R-Cleveland), spoke largely on teacher pay, as it continues to be the most discussed area of the budget. Teachers, who pressured their school districts across the state to cancel classes for the day, will be protesting May 1 for higher pay, Medicaid expansion and other issues.  

“A few facts about teacher pay in North Carolina,” said Moore. “North Carolina has passed 18 states in national teacher pay rankings since 2014. Today, we have the secondhighest teacher pay in the Southeast, and the National Association of Educators even recently ranked North Carolina as third astest rising state in the nation for teacher pay since 2014.” 

Moore announced that in addition to the pay raises, which focus on veteran teachers, they would also reinstate the teaching fellows program and again fund pay increases for those with a masters degree. Both of these areas were controversial when they were eliminated in previous budgets.   

Now the budget process will pass to the Senate, who will get a chance to make adjustments to the House’s proposal. Saine says the process could take a couple weeks, or it may be longer.  

“But the fact of the matter is they’re getting a budget passed to them in early May rather than early June, so they’ll have a full month head start, and we can start working out the differences,” said Saine. “By and large, though, we have many of the same priorities.”  

With a Democratic governor in Roy Cooper as well as the loss of their veto-proof majorities last fall, Republican leaders in the House and Senate may now see their main obstacle as Democrats rather than in the rivalries between the chambers that built up during their years of control.  

As a sign of this likely coming battle, the left-leaning Budget and Tax Center responded to the budget with a statement, saying, “As the House budget signals the beginning of budget debate in earnest, it is concerning that the baseline has been set so low and that so many of North Carolina’s priorities will be sidelined because our leaders continue to choose the interests of the rich and big companies over N.C. families.” 

But House Republicans believe they provided a good beginning for negotiations with the Senate and the governor.  

“The purpose of this and all budgets is to keep the economy of North Carolina fiscally sound,” Saine told North State Journal. “We’ve done that with this budget.”