Tax cuts, raises, schools? 5 numbers that show NC Senate Republicans’ budget priorities

North Carolina Senate Republicans unveiled a 400-page document Monday outlining their budget plan to spend an unprecedented amount of money in the state over the next two years.

Released weeks after Republican leaders of North Carolina’s General Assembly finally agreed on a spending number, it’s the first step in what is expected to be a months-long negotiation between the House and Senate, who have different priorities despite being run by the same party, and Democratic Gov. Roy Cooper, who wants hefty teacher raises and Medicaid expansion.

Cooper’s priorities this year are the same ones that became sticking points in 2019, when he vetoed the legislature’s budget because it didn’t include Medicaid expansion or large enough teacher raises. Because of that disagreement, the state hasn’t had a full budget since 2018.

After a years-long stalemate, Tuesday’s $52.3 billion two-year budget proposal reveals that, in a year that North Carolina has been considered as flush with cash and top state officials have increasing pressure to pass a spending plan, Senate Republicans are gunning to pad the state’s coffers and provide for deeper tax cuts for both North Carolinians and corporations than ever before.

The Senate is expected to discuss, vote on and pass its proposal by the end this week, allowing the House to propose changes to the legislation. Until the House starts to work through the Senate’s budget, its largely unclear how its priorities will differ from the Senate’s.

While we wait, here are some of the most important numbers the Senate has highlighted in its proposed budget.

3.99%

The proposed personal income tax rate for North Carolinians by 2026.

With support from some Democrats, the Republican-led Senate passed a tax package earlier this month that would have cut the income tax from 5.25% to 4.99%. But after a state forecast released last week showed significantly more revenue than expected, the Senate opted to allocate much of that money to a deeper tax cut, rather than other line items in the budget.

$5 billion

How much is slated to be in the state’s Rainy Day Fund — money set aside for issues like natural disasters — by 2022. Since winning a majority in the legislature in 2010, Republicans have often touted their handling of the state’s finances, saying their effective management has padded the state’s coffers.

“What we don’t want is what we had the last time Democrats were in control of the General Assembly,” Senate leader Phil Berger said in a press conference Monday. “And that is looking at how much money is in the bank account and how much money is being projected to come in and spend it all, put none away for savings, give none of it back to taxpayers.”

58.9%

The share of the Senate’s budget proposal that would be spent on education between 2021 and 2022. Some of the $15.1 billion allocated for K-12 education in 2021 - 2022 and $15.3 billion for 2022 - 2023 would specifically go to implementing the Excellent Public Schools Act, a bill championed by Berger that requires teachers be trained in the “science of reading,” which stresses phonics.

The new funding, however, still falls short of what’s needed to carry out the court-approved plan proposed by the State Board of Education to provide North Carolina students with a sound, basic education, as The News & Observer has previously reported.

In a statement released Monday, legislative Democrats also highlighted that the funding falls short.

“We should pass a budget ensuring our students have access to high-quality education, expanding access to health care so that it is a right for all and not a privilege for a wealthy few, and creating jobs that propel North Carolina to the forefront of innovation and economic success,” said Senate minority leader Dan Blue, a Democrat from Wake County.

$5.1 billion

The amount of federal coronavirus relief money the Senate has proposed to spend, most of which will go to education and infrastructure. This number is in addition to the $52.3 billion the legislature plans to spend over two years.

“All this federal money allowed us both to cut taxes for all the folks who need more money in their pockets right now and also dedicate millions of dollars to infrastructure projects without taking on any additional debt,” Republican Sen. Brent Jackson, of Autryville, said in a press conference Monday.

Jackson also said federal money would fund one-time bonuses of $1,000 to $1,500 for state employees.

7%

The proposed average pay increase for corrections officers for 2021-2022. That number is significantly larger that the Senate’s proposed 1.5% average pay increase for teachers, as well as the 1.5% for other state employees. Over two years, the plan would give corrections officers a total increase of 8.5% and other state workers a 3% pay increase..

Cooper, by contrast, wants a 10% pay increase for all state workers over two years. The Senate’s significantly smaller proposed pay increases signals that the issue is much lower in terms of budget priorities. It also demonstrates the Senate is unwilling to come closer to the governor’s proposed number, even after he vetoed the 2019 budget saying the 3.9% raise over two years wasn’t enough.

Staff writer T. Keung Hui contributed to this report.

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