RALEIGH, N.C. (WGHP) – North Carolina House Speaker Tim Moore had promised two weeks ago, when announcing Medicaid expansion in North Carolina, that he would provide the House budget for consideration before Easter.

Moore is on pace to meet that deadline after House members on late Wednesday received their drafts of the biennial budget and the many dollars and their sense included therein.

The House Appropriations Committee, with state Rep. Donny Lambeth (R-Winston-Salem) helping lead the way, on Thursday morning began a section-by-section review of the 639-page document, as members tried to understand the spending plan that raised salaries for teachers and public employees and also lowered the tax rate for individuals.

The budget calls for about $29.787 billion in 2023-24 and $30.903 billion in ’24-’25. It includes a reduction in tax revenue in both years, with the state individual tax rate decreasing to 4.5% in 2024, which is earlier than lawmakers had thought could happen.

“This is a very intense day, particularly in the House,” Lambeth said during the hearing. “It’s a very integral day in making of the laws of the state and preparing our budget this session.”

One of the key aspects of the budget is that it takes in billions of dollars in subsidies from the recently adopted expansion of Medicaid – legislative leaders had insisted that the rollout was “budgetary” – and distributed them across a variety of departments and initiatives.

“Medicaid money is sprinkled throughout the budget,” Lambeth told the committee. “There is $1.64 billion … for the next eight quarters for expansion incentive. We are reserving $1 billion for mental health reform. … There is $117 million for new safety grants, classroom safety, antibullying and local law enforcement grants. All those are within the area budgets.

“We allocated $1.1 billion in expansion dollars to target high-need areas: workforce development, mental health, school safety.”

The highlights

There are pages and pages of allocations, of course, and as state Rep. Amos Quick (D-Greensboro) pointed out during the hearing, there is a lot of “policy.” Here are some of the highlights of the 2-year spending plan:

• Teachers would receive 10.2% raises (5.5% in the first year), but they also would receive 8 weeks of parental leave (up from 4), stipends for having a master’s degrees and some assurances about class size for fourth and fifth grades.
• State employees would receive 7.5% raises (4.5% in the first year), and there would be an additional 2% for positions that are harder to fill, such as school bus drivers. North Carolina Highway Patrol employees would get 11% over 2 years.
• There are 2% cost-of-living increases for retirees (1% each year), a subject that committee members reinforced at length.
• UNC system employees would get 7.5% raises over two years.
• There is $40 million in the school safety allocation that Lambeth mentioned.
• There’s $1 billion in infrastructure to help with repairs to the water and sewage systems.
• The budget also allows for the State Bureau of Investigation to become an independent department, not under the Department of Public Safety, and gives legislators the right to remove its director for cause. The governor appoints the director to a 6-year term and currently is the only person who can remove that director.

Cooper’s plan

You can compare this to the spending plan submitted by Gov. Roy Cooper on March 15, which called for $32.95 billion in 2023-24 and $34.24 billion in ’24-’25. Cooper asked for $4.5 billion to “fully fund” public education, as the on-and-off Leandro court decision requires the legislature to do.

Cooper, in his last budget proposal before leaving office in 2024, asked for 18% raises for teachers; 8% cost-of-living increases for all state employees plus retention bonuses to address hiring gaps; about $1.2 billion for workforce development; $100 million for public safety; and $1.4 billion to address the mental health crisis.

Senate Leader Phil Berger (R-Rockingham) had called that “an irresponsible, unserious proposal from a lame-duck governor who wants future North Carolinians to pick up his tab.”

‘Fiscally-responsible’

In contrast, Rep. Jon Hardister (R-Whitsett), the House majority whip, called his chamber’s proposal “a fiscally-responsible budget that contains enhanced funding for the core services of government. Education, public safety, health care, transportation and state parks will receive increased funding in this budget.

“It also provides teachers, law enforcement, and other state employees with significant pay increases that are needed to help recruitment and retention.

“This budget is an example of prudent, responsible leadership, and I am hopeful that it will pass with bipartisan support.”

Rep. Ashton Clemmons (D-Greensboro), the deputy Democratic leader in the House, indicated she didn’t have any early impressions of the budget.

There will be amendments, more debate and ultimately votes before a plan would move to the Senate. House members had until 2 p.m. Thursday to submit amendments to House Bill 259, which is the omnibus appropriations bill.

“This is a budget that invests in our state employees, teachers, infrastructure and workforce development. Its budget balances the needs of the state with a growing economy while maintaining a sustainable spending path,” Moore (R-Cleveland) said on Wednesday afternoon.

“This is a fiscally responsible budget, cuts taxes and invests wisely. We recognize the need for targeted recurring spending as well as raises.”

Winston-Salem State question

Hardister presented the higher education portion of the budget, outlining spending across the UNC system and other allocations, and Rep. Amber Baker (D-Winston-Salem) grilled him about why Winston-Salem State University’s highly regarded nursing program wasn’t mentioned as receiving an allocation in the medical expansion portion of the budget.

“There’s no specific reason,” Hardister replied. “We followed the UNC system recommendation.”

He mentioned that he knew nursing programs were having difficulty hiring and retaining instructors. “Hopefully pay raises across the UNC system will help with instructors at Winston-Salem State.”

Lambeth, near the end of the meeting, in talking about the use of Medicaid funds, noted that the budget included “$332 million in workforce development grants specifically for schools like Winston-Salem State that has a nursing program. There is $40 million in health care for the UNC board … for healthcare workforce programs … and student assistance programs.”