State Senate approves budget plan
By Matthew Whittle
Published in News on May 31, 2007 1:45 PM
As votes were being taken Wednesday afternoon, state senators were surprised to see an almost unanimous backing of their version of the state budget. Passing 47-2, the bipartisan agreement was due in large part to the ending of two temporary taxes and the inclusion of several other Republican-backed fiscal provisions.
"It's not uncommon that we have legislation that has provisions that we like and ones that we oppose, and we have to make a choice if the positives outweigh the negatives," said Sen. Fred. Smith, R-Johnston. "The last four times I voted on a budget, the negatives outweighed the positives.
"This is the first time when I looked at the budget, the positives outweighed the negatives. This is the best budget I've seen since I've been up here."
And, he added, it was largely on the strength of the tax cuts and the permanent capping of the gas tax at 29.9 cents per gallon -- its January 2006 level -- that it received his and other Republican votes.
But the $20 billion Senate plan, which was approved less than three weeks after the House sent over its version, also spends about $266 million less -- still about $200 million more than Smith would have liked, though.
"It's a pretty lean, tight budget. It's a close budget," Sen. John Kerr, D-Wayne, said.
GOP Sens. Andrew Brock of Davie County and Eddie Goodall of Union County cast the only no votes. Goodall said he wanted more significant education reforms, such as more charter schools or vouchers for private schools. Another GOP senator was absent.
Smith also said he would have liked to have seen the cap on charter schools lifted and more done to lower the dropout rate.
But Republicans were particularly pleased that Senate Democrats agreed to sunset the extra quarter-cent on the sales tax and the higher top income tax rate for the highest wage earners. Both were first approved in 2001.
"That's a lot of money, but the Senate said a deal is a deal. At the time we did that, we said they were temporary and I think a lot of people felt we'd given our word," Kerr said.
Both Easley's budget proposal and the House budget, however, keep the $300 million in revenue in place to pay for needed education and health programs. The Senate proposal would make up the revenue by setting aside about $165 million less for the rainy-day fund and spending about $116 million less in upfront money on the state's building needs.
Republicans also were happy to see the elimination of long vacant positions in state government and more scrutiny of nonprofits that receive state funds.
But, Smith said, there were some reservations about the borrowing of about $1.2 billion, largely for a host of university system projects Democratic leaders say are necessary to help train workers and build research facilities to create high-tech jobs in the future.
"We're one of seven states in America with a AAA credit rating, the best you can have, and we're rated fourth for how we manage our money," Sen. Charlie Albertson, D-Duplin, said. "We've got to think about the future of our state. We're growing by leaps and bounds.
"I think this is very prudent and necessary."
Easley and the House -- which only sought $450 million in these kind of bonds -- criticized the plan, though, which would not require that voters approve the borrowing. Easley and state Treasurer Richard Moore would prefer a referendum, which also would reduce the interest paid on the debt.
Also in the budget are plans to create three community needle exchange initiatives, raise court fees to generate $37 million to hire hundreds of court workers, including 300 clerks, 60 assistant prosecutors and 10 district court judges. In addition, it would give rank-and-file state employees a 4 percent raise, instead of the 4.25 percent increase included in the House plan, while keeping the average 5 percent raise for teachers that both the House and Easley proposed.
It does not provide for any immediate Medicaid relief -- unlike the House version, which had $100 million in one-time funds. Plans are to work toward a permanent solution to the $500 million problem later in the session.
"We've got do something about taking Medicaid off the counties," Kerr said. "That's something we've got to resolve. I think that'll be the next big thing."
Locally, the plan also includes provisions to begin working on the Wayne County Regional Agricultural Center at Cherry Research Farm and the bio-fuels research facility at Williamsdale Farms in Duplin County, Kerr and Albertson said.
The vote Wednesday marked the first time since 2000 that most GOP members backed the Democratic-penned version of the Senate budget.
"Partisan lines were nonexistent today," said Senate leader Marc Basnight, D-Dare, after a budget debate that lasted only 90 minutes. "People felt strongly that this budget represented the very best interests of the people of North Carolina."
A final Senate vote was expected today, setting the stage for negotiations between the two chambers and Easley. Lawmakers hope to send a final budget to the governor for his signature by the end of the June.
"There are a lot of things that we're going to have contend with," said Rep. Mickey Michaux, D-Durham, the House's senior budget-writer. "I don't know how long it's going to keep us here."
The Associated Press contributed to this report.
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