NC Senate budget bill passes with enough Democrats to override a Cooper veto

With a sunny economic forecast, a surplus of money to spend and more from the federal government in coronavirus relief, the North Carolina Senate gave tentative approval Thursday to a proposed state budget.

It has big tax cuts, some raises and billions of dollars in federal spending.

The Republican-controlled Senate voted 32-18 on Thursday and 32-17 in a final vote Friday, with enough support from Democrats to override a potential veto from Democratic Gov. Roy Cooper.

Other Democrats, though, said it came up short on education and other funding, and criticized corporate tax cuts.

Senate leader Phil Berger, an Eden Republican, said you can’t “just keep spending” and “write the check” because you have a checkbook, without looking at longer-range state spending.

The budget, Senate Bill 105, would give an average of 3% raises to teachers and most other state employees over the next two years. It also doles out $5.4 billion in federal American Rescue Plan Act funds for coronavirus relief.

The budget’s tax cuts include cutting the personal income tax rate to 3.99% by 2026, down from 5.25%, and phasing out the corporate income tax rate to zero. Also, the tax bracket for paying zero taxes, called the standard deduction, would be raised to $25,500. The child tax deduction would increase to $500.

Sen. Brent Jackson, the head budget writer and an Autryville Republican, said this was the first step in the summer budget process.

Democrats tried several amendments, including multiple about education that mirrored Cooper’s budget proposal.

Rep. Michael Garrett, a Guilford County Democrat, said that the state “is sitting on unprecedented revenue” and criticized what he said were low raises for civil servants.

“We need to put our money where our mouth is and elevate teacher salaries,” Garrett said, asking for the same average 10% raise from Cooper’s proposal.

He mentioned North Carolina economy and the revenue forecast, which anticipates $6.5 billion more in tax collections than expected.

“Old excuses for paltry pay increases are out the window this year,” Garrett said.

Sen. Natalie Murdock, Durham Democrat, tried an amendment to raise wages for noncertified school staff to $15 an hour.

“I think we can all agree a living wage for all state employees is a good investment in our economy,” Murdock said.

The amendments were tabled by Sen. Ralph Hise, one of the budget writers and a Spruce Pine Republican.

Sen. Jay Chaudhuri, a Raleigh Democrat, tried an amendment to restore master’s degree pay for teachers, which also failed.

“Maybe it moves us a little closer to getting a ‘yes’ on that budget,” Chaudhuri said about his amendment, which was also tabled by Hise.

On taxes, Wake County Democratic Sen. Wiley Nickel pushed an amendment, which also failed, to keep the corporate tax rate unchanged and fund universal pre-K for North Carolina children.

Senate Minority Leader Dan Blue, a Wake County Democrat, said the state can’t use the excuse of not having enough money tied to a decision to not fund things. He said the lack of funding, even with a surplus, shows lawmakers’ priorities. He said he wanted a more open and “vigorous” debate between lawmakers over the budget.

The floor debate on Thursday was the second of three votes required to move the bill to the House. Friday’s final vote was passes quickly without discussion.

The four Democrats who voted for the budget are Sen. Paul Lowe, Sen. Kirk deViere, Sen. Don Davis and Sen. Ben Clark.

“This budget is not perfect and I am hopeful that we will work together to get a final budget that both Democrats and Republicans can agree on and one that Governor Cooper supports and signs,” deViere, of Fayetteville, said in an emailed statement about his vote. “North Carolinians deserve their elected leaders to work together and need it now more than ever as we rebuild back from the pandemic,” he said.

House budget up next

Now that the Senate is done with its budget, all eyes are on the House for the next round of the budget. That will come most likely in mid-July, House Appropriations Chair Rep. Jason Saine told The News & Observer on Wednesday evening.

“The first thing we’ll do as the House is to really ingest what the Senate has put as their priorities. Because that’s really what they pass, is their priority list. We’ll look, see where we agree, see where we differ,” Saine said. He said that will take a couple of weeks.

There will be House Appropriations meetings to go over the Senate budget next week, then the chamber will take the week of July 4 off. The House budget will likely come out the week of July 19, Saine said.

House Speaker Tim Moore said Wednesday that the timing will be left to Saine, who leads the powerful Appropriations committee.

“We’ll take our time,” Saine said. He said there are already some budget negotiations going on between the chambers.

One aspect of the Senate budget that was criticized by teachers and most other state employees was the proposed raises of an average 3% over the next two years. That is unlikely to be as low in the House budget.

“The House is generally always higher,” Saine said Wednesday.

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