State budget direction sharpens, strengthens in the House of Representatives



(The Center Square) – Top North Carolina business leaders came out Tuesday against a budget that incorporates Medicaid expansion, legalized casinos and investments in the business-led nonprofit NCInnovation.

The letter sent to lawmakers follows a leaked 611-page draft of the overdue state budget for the next two years. Two expected votes Wednesday in the House of Representatives – on the legislation linking casinos and Medicaid, and the state budget – may tell if there was impact from Bob Luddy, Art Pope, John Allison, Rodney Pitts and E.C. Sykes.

While much of the discussions on a state budget that was due July 1 have hinged on a proposal to legalize casinos and the budget delay’s impact on expanding Medicaid, those issues were tied together in a separate bill on Monday. And at that time, it did not appear the Grand Old Party was unified.

Chamber leaders have stressed the budget draft could change and negotiations are ongoing; when the votes take place is subject to change as well. Speaker Tim Moore, R-Cleveland, says he has all 72 House Republicans on board with the budget, and up to a dozen Democrats.

“While we applaud the state’s remarkable economic success over the past decade, we believe that the key to sustaining this prosperity lies in a fiscally responsible budget that refrains from allocating funds to NC Innovation, legalizing casinos, or expanding Medicaid,” read the letter.

Luddy is CEO of CaptiveAire; Pope is CEO of Variety Wholesalers; Allison is retired CEO of BB&T; Pitts is chairman of Southern Elevator; and Sykes is a general partner with Aslan Ventures.

The five say public investment in the nonprofit NCInnovation, meant to boost businesses that leverage university research, would “create market distortions and stifle true innovation,” while a proposal to legalize four casinos would “only complicate budget negotiations.”

Medicaid expansion, “which represents an expansion of government control and intervention in the health care sector,” could “disrupt market dynamics, leading to fewer options for consumers and potentially higher costs for those who choose to remain in the private insurance market,” the letter read.

The developments follow efforts to include casinos in the budget that failed to gain traction from enough Republicans to clear the lower chamber. Republican House leaders are now hoping to court enough Democrats to support casinos and video lottery terminals by tying Medicaid expansion to House Bill 149 to legalize both.

The House and Senate introduced competing budgets this spring that aligned on spending about $60.7 billion over two years. Gov. Roy Cooper’s spending plan is a little more than $67.1 billion. Each differed on a variety of items, from teacher and state employee raises to tax cuts.

The draft budget viewed on Monday previews how those differences were resolved, though it has not been posted to the state legislative website as of this publishing.

The draft would give non-certified school personnel and state workers a 4% raise this year and 3% next year, and includes an additional $4.7 million in recurring funds for bus driver salaries. Starting teacher pay would increase by $2,000 a year to $39,000, while top teacher pay would increase from $54,000 to $55,100.

The spending plan would cut North Carolina’s personal income tax from 4.75% to 3.99% by 2026, slower than the pace sought by the Senate, with the potential to accelerate to 2.49% if revenue triggers are met.

It would further cap the state’s franchise tax on business investments at $150,000 a year.

Instead of $1.4 million requested for NCInnovation, the draft would provide $250 million each of the next two years, far less than the full amount included in the Senate plan but five times what House Republicans and Cooper proposed.

Other spending provisions include a 1% tax on ride share services, and an expansion of the state’s Opportunity Scholarship program parents can use to send their children to private schools. The plan would eliminate the income limit and award vouchers based on income, in line with legislation introduced this session.

A 22.5% pay raise for the governor and 15% pay raise for other Council of State members over the two years also survived from earlier proposals.

The legislation incorporates numerous policy provisions, as well, including a limit on the State Board of Education’s ability to deny funding for charter schools, a response to recent actions by the board that would require its approval to release the funding.

Other policy changes would increase the retirement age for justices of the state Supreme Court and Court of Appeals from 72 to 76, which would extend the tenure of Republican Chief Justice Paul Newby. The bill would further allow justices and appeals court judges to carry concealed weapons in court, which is already permitted for judges in lower courts.

There’s also changes to the sports wagering law approved in June, the appointment process for the Judicial Standards Commission, and a requirement for the state’s community college system president to be approved by the General Assembly.

Still other policy changes would prohibit state and local government agencies, including schools and colleges, from requiring COVID-19 vaccinations; and delay implementation of a Parents’ Bill of Rights approved this session until Jan. 1, a measure championed by Republican state Superintendent Catherine Truitt.



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