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Senate budget, like the House, about $6B below governor’s spending plan

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(The Center Square) – Senate Republican leadership introduced a biennial budget on Monday that would speed up tax cuts and give teachers and state employees raises, all while spending about $6 billion less than a proposal from Democratic Gov. Roy Cooper.

The $60.7 billion – a bottom line match to the House of Representatives’ proposal – in total spending Senate Leader Phil Berger unveiled at an afternoon press conference proposes to spend $29.8 billion in the first year, and $30.9 billion in the second, reflecting a more conservative approach in line with a budget approved by the House of Representatives last month.

Cooper’s plan, released in March, aims to spend about $67 billion over two years, and includes an 18% raise for teachers, as well as bonuses for educators and state workers. The House and Senate are expected to work toward a final budget proposal in the coming weeks to present to Cooper before the new fiscal year begins July 1.

Cooper has little room to negotiate over the budget with Republican supermajorities in both chambers that tied approved Medicaid expansion legislation to a signed fiscal plan. Cooper has pursued Medicaid expansion since taking office in 2017.

“This is a strong budget that addresses our state’s needs without breaking the bank,” said Senate Appropriations Chairman Brent Jackson, R-Sampson. “We increase spending where it is needed, bolster our reserves in light of economic uncertainty, and give money back to the hardworking people of North Carolina.”

Berger cited the threat of recession for heavy investments in stabilization, contingency and rainy day funds of nearly $3 billion.

“By the end of the first year of biennium the state’s reserves will reach $5 billion,” he said.

State employees would receive a 5% raise over the two years, while teachers would receive a 4.5% increase. Starting teacher pay would increase by 11% under the Senate proposal, going from about $37,000 a year now to $41,000 by 2024-25. Average teacher pay will be $59,121 by the end of 2024-25, just under the state median household income.

The House budget includes teacher raises of 4.25% the first year, and 3.25% in the second, and would also restore master’s pay removed in 2013.

The Senate budget would accelerate personal income tax cuts to reach 4.5% in 2024 and 2.49% by 2030, shaving $1.2 billion from tax bills over the biennium. Cooper’s proposal would cancel scheduled cuts for households making more than $200,000, while the House budget would speed up the scheduled cut to 4.5%.

The Senate budget would further invest heavily in research and economic development in rural areas, while also setting aside funding for agriculture research, flooding mitigation, food banks, and UNC System schools to address health care workforce shortages.

The budget would also leverage $1.6 billion in federal funds from Medicaid expansion to increase wages for direct care workers, investments in skilled nursing facilities, and behavioral health providers.

Other funding would go toward expansion of the state’s Opportunity Scholarship Program for students to attend private schools, a new $10 million school health allotment for more nurses, and $35 million in school safety grants.

Three weeks ago, Cooper reiterated his ask of lawmakers on education funding. It was among his first tweets as the Senate rolled out its plan late in the afternoon.

The Senate budget would spend $70 million to develop and expand community college courses in high-demand industries like nursing programs, and increase funding for needs-based scholarships by $12.5 million in the first year and $25 million in the second. Another $96 million would go to a labor market adjustment reserve to community colleges to provide additional pay raises in areas with shortages, such as health care.

University tuition, meanwhile, would remain flat under the Senate proposal, Berger said.

The Senate budget is expected to move through committees beginning Tuesday and likely clear the upper chamber this week with votes on Wednesday and Thursday.

“What we have been doing has been working, and this budget is largely a continuation of the responsible spending that has gotten us to where we are today,” said Senate Appropriations Chairman Ralph Hise, R-Mitchell. “We are keeping North Carolina attractive to businesses and showing our competitors that North Carolina plans on staying the best state for business.”

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