NC Senate passes budget proposal, focus shifts to NC House

Senate leader Phil Berger answers questions from reporters during a press conference outlining the state budget Monday, June 21, 2021 at the North Carolina Legislative Building. The budget includes tax cuts, raises and bonuses. (FILE/AP)

RALEIGH — The North Carolina Senate passed its 2021-23 budget on Thursday, agreeing to spend $25.7 billion in 2021-22 and $26.6 billion in 2022-23.

The plan follows the conservative approach Republicans have followed since taking over the General Assembly in 2011, closing up long-running budget deficits and now boosting state revenues by billions of dollars.

Senate Leader Phil Berger (R-Eden) said of the budget package, “Because of the state’s strong financial position after a decade of responsible governance, Senate budget writers could pair historic tax cuts with a massive infrastructure package. Responsible spending, tax cuts whenever possible, and saving for a rainy day have defined Republican budgets for 10 years, and the formula works.”

The Senate plan incorporates a tax cut package that passed the chamber reducing the state’s personal income tax rate down to 3.99% and increases the zero-tax bracket to $25,500 for married couples. The package also reduces the corporate income tax rate until it is eliminated entirely in 2028.

According to a Senate release, a family of four earning the median household income would see their tax burden reduced by over one-third.

In addition to tax cuts, the budget replenishes the rainy-day fund with an additional $3.8 billion and gives $4.3 billion over the next two years to the State Capital Infrastructure Fund, which pays for much of the state’s infrastructure. While $1.3 billion of those funds will be used to service existing debt, the other $3 billion will go to new infrastructure projects. Over the next 10 years, $12 billion total will be allocated to infrastructure, according to the Senate plan.

Of that infrastructure funding, $1.2 billion would go to resurfacing roads, and $700 million would go to road projects over the biennium.

Public employees, including teachers, received 3% raises over the biennium, with 1.5% in each year. Bonuses of up to $1,800 are also available to teachers. The Senate proposal sets a $13 minimum wage for non-certified workers at K-12 schools and community colleges, such as janitorial staff and lunch-room workers.

The NC House will now take up its own plan, which will look different from the Senate’s proposal. Once the House reaches its agreement, expected to take six-to-eight weeks, the two sides will come together on a final budget to send to Gov. Roy Cooper.

In an emailed statement, Cooper called for the General Assembly to fully fund his budget recommendations, totaling $27.3 billion in 2021-22 and $28.5 billion in 2022-23.

“Even though the Republican Senate bill giving big tax breaks to corporations and the wealthy is bad policy, we have enough money to pass my entire budget plus all those tax breaks with more money still remaining. We must now negotiate a responsible bipartisan budget that addresses everyone’s concerns,” Gov. Cooper said on June 15.