NC Senate unveils $23 billion state budget

NC Senate unveils $23 billion state budget

RALEIGH, NC (WECT) - North Carolina Senate Republicans have released details about their $22.9 billion budget that will fund the state for the next two years.

Senate leader Phil Berger and top budget-writers unveiled their spending proposal Tuesday. They say the plan would provide 2.5 percent more to spend next year than the current-year budget allows. Gov. Roy Cooper proposed a 5.1 percent increase.

The GOP budget proposal controls the rate of growth in part by incorporating its previously announced plan to reduce further individual and corporate income tax rates. The personal income tax rate will be cut from 5.499 percent to 5.35 percent in 2018. The corporate tax rate will be cut from 3 percent to 2.75 percent in 2018 and to 2.5 percent in 2019.

The Senate proposal does include teacher, principal and state employee pay raises; another $150 million to address Hurricane Matthew recovery; and an additional $363 million will be added to the state's rainy day fund.

Senators Michael Lee (R-New Hanover) and Bill Rabon (R-Brunswick) released a statement Tuesday announcing the state's film grant program will continue to receive its usual allotment of $30 million, but half of that will now be permanent.

"For the first time we've converted $15 million of the film grant program's budget into permanent annual funding that will bring certainty and stability to Wilmington's film industry. We look forward to working with Representatives Davis and Grange to increase funding for the film grant program and make the program's entire appropriation permanent in the final budget," that statement says.

Since the film grant program was implemented in 2015, the program has been funded year-to-year with a one-time allotment of money. The Senate's budget makes $15 million of the funding permanent for the first time.

Berger's office released the following key provisions in the state budget:

In Salaries and Benefits:

  • Keeps the plan to increase average teacher pay from last year’s budget, investing $131 million in the first year. This is in addition to the teacher pay raises legislators passed in 2014, 2015 and 2016.
  • Includes a new plan to let highly-qualified new teachers begin at a higher pay grade on the salary schedule, providing financial incentive to those who accept positions in low-performing schools, are licensed in special education or STEM classes or meet other criteria.
  • Provides $28.5 million to increase principal and assistant principal pay, including funds for performance bonuses for principals.
  • Includes $10 million in additional compensation for community college employees.
  • Provides a $750 or 1.5 percent salary increase – whichever is greater – to most state employees.
  • Offers experienced-based step increases to teachers, State Highway Patrol troopers, clerks and magistrates.
  • Provides $10 million in the biennium toward hard-to-hire positions across state government, such as health care technicians and nurses.
  • Designates roughly $4 million to allow Gov. Cooper to increase the base salary ranges for many state workers.

In Education:

  • Increases funding for public education by more than $600 million over two years.
  • Fully funds K-12, community college and public university enrollment growth.
  • Allocates $75 million for grants to economically struggling, rural counties to assist with critical public school building needs.
  • Invests an additional $10 million in recurring dollars in textbooks and digital resources.
  • Codifies the legislature’s intent to use data it is currently gathering from local school systems in accordance with state law to fund a new salary allotment for kindergarten through fifth-grade program enhancement (music, arts, physical education) teachers beginning in the 2018-2019 school year.
  • Expands the teacher assistant tuition reimbursement program to 14 additional counties, which provides tuition reimbursement for up to 5 TAs per district to pursue a college degree leading to teacher licensure.

In Health and Human Services:

  • Provides more than $18 million over two years to add 2,350 new pre-K slots – cutting the waitlist in half for at-risk children.
  • Upgrades the Controlled Substance Reporting System that will use advanced analytics to detect and fight prescription drug abuse.
  • Allocates $15 million over two years to community health centers, rural health centers, free clinics and other health services providers in rural and underserved areas that assist the uninsured.
  • Invests $18 million to improve North Carolina’s child welfare program, including new training and prevention programs, and nearly $4 million to improve accountability and oversight of the system.
  • Earmarks close to $3 million to provide support for additional foster children in the system.
  • Continues preparing for the transition to Medicaid reform by allocating $150 million over two years to grow the Medicaid Transformation Reserve.

In Justice and Public Safety:

  • Begins the process to “raise the age” in North Carolina, ensuring 16- and 17-year olds suspected of misdemeanor offenses would be tried as juveniles instead of adults by December 1, 2020, and establishes a Juvenile Jurisdiction Advisory Committee to develop specific plans for implementation.
  • Funds an opioid prevention pilot project in Wilmington, putting in place a quick response team to address the needs of opiate and heroin overdose victims.
  • Strengthens laws against human trafficking and funds signage to increase awareness of the warning signs of trafficking.
  • Creates a new Department of Adult Correction and Juvenile Justice to more effectively manage inmate custody and supervision statewide.
  • Funds needed additional positions in the state court system, including 56 new deputy clerks of court and 37 new assistant district attorneys.
  • Provides more than $4 million for law enforcement training for North Carolina officers.

In Taxes and Economic Development:

  • Reduces the tax burden on North Carolina families and small businesses by cutting the personal income tax rate from 5.499 to 5.35 percent in 2018, and by increasing the amount of income that is exempt from state income tax.
  • Lowers the corporate income tax rate from 3 percent to 2.75 percent in 2018 and to 2.5 percent in 2019.
  • Simplifies and reduces the franchise tax on small businesses by cutting what is effectively a statewide property tax on small businesses and creating a flat $200 tax on the first $1 million of a business’s net worth.
  • Creates a new economic development fund to help attract major manufacturing projects – like automobile and aerospace manufacturers – to the state.
  • Provides additional funds to support tourism advertising as well as domestic and international advertising to promote economic development.
  • Allocates close to $4 million for revitalization grants in towns and cities across the state.

In Agriculture and the Environment:

  • Increases funding for the Clean Water Management Trust Fund, the Tobacco Trust Fund and the Agricultural Development and Farmland Preservation Trust Fund.
  • Expands support for the aquaculture industry and provides additional funding for dredging to ensure economic activity at the North Carolina coast can continue.
  • Allocates half a million dollars to expand international marketing of North Carolina agricultural products.
  • Provides recurring funding for engineers to improve dam safety and review emergency action plans to help prevent catastrophic flooding.
  • Sets aside $2 million to purchase a new firefighting aircraft in the wake of wildfires in Western North Carolina.

In Transportation:

  • Increases funding for the Strategic Transportation Investments Program (STIP) by $320 million over two years, which will allow 100 new highway projects to be added over a ten-year period.
  • Includes $246 million to improve structurally deficient bridges across the state, adds $130 million to improve the condition and safety of existing roads and increases funding for pavement preservation by $70 million, extending the life of thousands of miles of roads.
  • Invests $40 million to fund immediate need construction projects across the state that improve mobility and safety, reduce congestion and spur economic development.
  • Includes $208 million over two years for a Roadside Environmental Fund dedicated to ensuring the safety and beautification of the state’s highways.
  • Modernizes the state’s transportation network by providing additional funding to airports across the state for infrastructure improvements, and to the State Ports Authority for infrastructure and dredging needs.


  • Brings the rainy day fund to $1.838 billion, or 8.2 percent of last year’s budget – the largest dollar amount and percentage in state history.
  • Adds $120 million to make repairs and renovations to state and university facilities.
  • Helps preserve North Carolina’s military operations by allocating $2 million for the next Base Realignment and Closure (BRAC).
  • Continues the commitment to improving government transparency by funding a website that makes every state agency, county, and local school district budget available for citizens to view online.
  • Aims to make government operations more efficient by investing in a fully-consolidated statewide Enterprise Resource Planning system.
  • Helps the office of the State Auditor conduct more specialized audits and allocates funding to assist the state Department of Revenue in identifying and preventing tax fraud.

Copyright 2017 WECT. All rights reserved. The Associated Press contributed to this report.