Old North State Report - May 12, 2017
On Tuesday Senate leaders outlined their 2017-18 spending plan. The $22.9 billion proposed budget would spend about $600 million less than Governor Roy Cooper wanted but still about 3.75 percent more than the state is projected to spend in the 2016-17 fiscal year. The State is expected to end the fiscal year with a $580 million surplus from its $22.5 billion budget for 2016-17. Relevant committees reviewed the 358-page bill on Wednesday and then the required floor votes were held on Thursday afternoon and very early Friday morning.
Committee (“money”) report on base, expansion, and capital budget:
The Senate included their tax cut plan into the budget, arguing it will spur more economic growth. The plan lowers the personal income tax rate from 5.499 percent to 5.35 percent in 2018 and the corporate tax rate from 3 percent to 2.5 percent by 2019. The proposal also would expand the standard deduction and make changes to mortgage interest deductions and child tax credits. The House is expected to approve a smaller tax cut package. Democrats characterized the Senate approach as a “giveaway to millionaires.”
Additional highlights of the bill include:
- Spending on K-12 public education accounts for $9 billion of the proposed budget, including an average 9.5 percent teacher pay increase over the next two years.
- A $150 million reserve fund to help carry out the plan lawmakers have already approved to convert Medicaid from a fee-for-service system to a managed care model.
- The Senate set aside recovery money for Hurricane Matthew victims ($150 million), the state's "rainy day" reserve fund ($363 million) and hundreds of millions for highway and bridge projects.
- The certificate of need system that regulates when and where new health care facilities can go around the state would be eliminated by 2025. The House is not expected to agree.
- Sixteen- and 17-year-olds charged with non-violent crimes would no longer be tried as adults by 2020. There is considerable momentum in the House for this change.
- State workers who are hired after July 2018 wouldn't be entitled to health benefits when they retire. Also, current state workers are not pleased with a proposed 1.5 percent pay increase.
Senior House Appropriations chair Nelson Dollar said the House expected to unveil and vote on their version during the week of Memorial Day. That timetable (along with the appointment of a conference committee to iron out differences) would make it possible for the legislature to meet their stated goal of passing a budget before the end of the fiscal on June 30th.
Also, the General Assembly overrode the Governor’s veto of House Bill 467, which limits the amount of compensatory damages that may be awarded in a private nuisance action against an agricultural or forestry operation to the fair market rental value of the plaintiff's property:
The articles published in this newsletter are intended only to provide general information on the subjects covered. The contents should not be construed as legal advice or a legal opinion. Readers should consult with legal counsel to obtain specific legal advice based on particular situations.