NC Senate approves budget, sends it to House

House Speaker Tim Moore (R-Cleveland), Senate Leader Phil Berger (R-Rockingham)

RALEIGH, N.C. (WNCN) – The North Carolina Senate moved swiftly Wednesday to pass the state budget Wednesday, sending the document on to the House for approval.

The bill, once it passes both houses, will go to Gov. Pat McCrory. The bill was posted online late Monday night.

“We recognize we have been here a while,” House Speaker Tim Moore said Monday. “We have dealt with a lot of chronic problems and the can has been kicked down the road for decades. So it’s taken a while.”

The $21.74 billion budget, which includes monies for teacher assistants and driver education. Funding for both was uncertain as state leaders wrangled over how to spend state funds.

There are $750 bonuses for state employees and teachers. Starting teacher pay will rise from $33,000 to $35,000, Senate leader Phil Berger said. Teachers also get “experienced-based” raises.

The personal income tax rate would fall in 2017, but sales taxes also would soon apply to things like car repairs and appliance installations.

Senate Democrats complained the budget is being voted on too quickly after details were finalized in secret.

North Carolina budget highlights

Monies to rural counties: State leaders had discussed changing the formula for how state revenues are distributed to counties, with rural counties pushing for a bigger share of the revenue. But Moore, asked about that Monday, said, “There are no losers in this plan. There are no monies being taken out of the urban areas in the way it’s been structured.”

Berger told reporters the formula for how the monies would be distributed was complicated and hard to summarize in a brief amount of time.

Overall increase: Berger said the plan includes a “responsible” 3.1 percent increase in spending, including “hundreds of millions of dollars” in education.

Transportation needs: Invests $705 million over two years in transportation needs, “in part by ending a $216 million annual transfer from the Highway Fund to the General Fund,” Berger said.

Tax reform: Reduces taxes on North Carolinians and small businesses by $400 million over the two-year period. The personal income tax rate will be cut to 5.499 percent beginning in 2017, Berger said. It will increase the zero tax bracket in 2016, insuring that married people filing jointly pay no state tax on their first $15,500 of income.

Corporate taxes: Will move to base corporate taxes on a “single sales factor” over three years, Berger said.

Medical expenses: “Fully restores” the state tax deduction for medical expenses.

Historic preservation tax credits: These are restored, something that had been a priority for Gov. Pat McCrory, who believes these are critical in revitalizing small towns.

State employees: Get an additional $313 million in first year in compensation, including a $750 bonus for all teachers and state employees, Berger said.

Teacher pay: Funding for teacher assistants is retained. Teachers and administrators will get the $750 bonus, plus “experienced- based” step increases. Speaker Moore said the budget increases funding for K-12 by $410 million.

State Highway Patrol: Gets 3 percent increase for “all sworn members.”

Correctional officers: Get $38 million over two years to boost salaries for correctional officers.

Community colleges: Funding goes up by $20 million.

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