Senate budget uses NC revenue boon on more tax cuts, capital
RALEIGH, N.C. (AP) — North Carolina Senate Republicans unveiled a two-year state budget proposal Monday that sticks to earlier spending limits even with recent news of a massive revenue windfall. They instead earmark billions more now for savings, with plans for deeper tax cuts and more construction projects to follow the rest of the decade.
The measure also offers pay raises and one-time bonuses to public school teachers and state employees, although the permanent raises fall short of what Democratic Gov. Roy Cooper proposed in his budget in March.
The bill, which is expected to pass through the chamber by Friday, seeks to spend $25.7 billion in state funds in the year starting July 1 and $26.6 billion the following year, in keeping with a spending cap that senators settled on with House Republicans this month. However, state economists predicted last week that the state would have $6.5 billion more at its disposal over the next two years above and beyond what was anticipated, beginning with an extra $1.9 billion in state coffers by June 30.
But senators say they're committed to the cap — otherwise concerned that much of the cash influx attributed to a resurgent post-pandemic economy can't be counted on in the long term to pay for permanent initiatives.
"We're in the best fiscal shape here in North Carolina in a generation,” Senate leader Phil Berger said at a Legislative Building news conference. “Our budget philosophy is working, and we're going to continue to follow that philosophy.”
Instead, the Senate measure injects over $3.8 billion more into the state's rainy-day emergency fund, reaching a record $5 billion by mid-2023. Another $3 billion would go to the state's capital improvement fund as part of 10-year, $12 billion construction plan for public schools,...