House passes NC budget; talks with Senate ahead

North Carolina House gives final OK to its budget; negotiations with Senate to begin soon

Associated Press

RALEIGH, N.C. (AP) -- The North Carolina House completed debate Thursday on its version of a state budget, setting the stage for negotiations with the Senate. The length of talks could hinge on how quickly Republicans can compromise on competing tax plans.

The Republican-led House gave its final approval to a two-year plan that would spend nearly $20.6 billion for the fiscal year starting July 1. The 77-40 vote in favor of the proposal was almost identical to the nearly party-line vote Wednesday night giving the plan tentative approval. The full House debated the budget and amendments for more than 10 hours over two days.

The Senate, which passed its own budget three weeks ago, is now expected to formally reject the House changes next week, leading to a conference committee. They aim to get a final plan to Republican Gov. Pat McCrory by the end of the month.

Budget negotiators said completing the deal in time to avoid a stop-gap spending measure to keep government operating isn't impossible.

"If everything works, we can get out by July 1," said Sen. Neal Hunt, R-Wake, co-chairman of the Senate Appropriation Committee. Added Senior House budget-writer Rep. Nelson Dollar, R-Wake: "I think that we should be able to come to a conclusion on the budget in a very reasonable amount of time."

While the difference in spending between the two plans is just $12 million next year, they disagree in key areas about how to spend the money they've got and the policies associated with it.

The House wants to spend $118 million more than the Senate on salaries for teacher assistants in early grades next year and recommends $50 million over two years to allow thousands of children in low-income families to attend private or religious schools. The Senate wants to eliminate job-protecting teacher tenure in the public schools and spend $53 million more next year on the University of North Carolina system than the House.

"The big difference is between the education budget," Hunt said.

The two chambers also disagree on the correct course of spending for rural economic development. They'll also have to work out compromises on the use of state lottery profits, whether to extend ferry tolling at the coast and whether survivors of North Carolina's defunct sterilization program should receive compensation.

Legislators will likely run a parallel course of negotiations to work out differences on plans to cut tax rates and change how and where sales taxes are collected. House Republicans this week approved a tax plan that forecasts $300 million less in available funds through mid-2015. Analysts predict the rival Senate proposal, given tentative approval Thursday, would mean $684 million less for the state over two years.

House Speaker Thom Tillis, R-Mecklenburg, said this week he expected a tax agreement to be slightly ahead of a final budget solution because budget-writers needed to know how much money they'd have to spend. "We'll have to solve the tax reform first," said Tillis, who has started fulfilling his earlier promise by refusing to shave until this year's session adjourns.

House members spent more than three hours debating the chamber's budget before Thursday's vote. Democrats berated Republicans for a plan that they alleged doesn't take care of people still struggling to fully rebound after the recession. The GOP could have spent more for public education and to give raises to state employees and teachers, they said.

"The argument that's being used that 'we have no choice' is just not true," said Rep. Rick Glazier, D-Cumberland. "The highest priority of this state is to educate the next generation and this budget fails to do that."

Republicans called the plan responsible. Rep. Bryan Holloway, R-Stokes, another chief budget-writer, asked Democrats rhetorically which taxes they would raise to spend more.

"You've got to live within your means, because you never know when the bottom is going to fall out of the economy again," Holloway said. One Democrat, Rep. Bill Brisson of Bladen County, voted for the budget while Rep. Robert Brawley of Iredell County was the only Republican to vote against it.

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