- Associated Press - Tuesday, May 19, 2015

RALEIGH, N.C. (AP) - North Carolina House leaders had a better time Tuesday moving along their proposed two-year state government budget, a day after some fellow Republicans nearly sent it back to budget-writers with complaints about tax credits and incentives.

The full House Appropriations Committee recommended the measure Tuesday night on a voice vote after meeting for seven hours and voting on several dozen amendments.

None that passed dramatically changed the content of a $22.2 billion spending plan for the fiscal year starting July 1. The measured was primed to hit the House floor Wednesday for lengthy debate and the first of two required chamber votes.

The taxes and fees contained in the budget barely passed the House Finance Committee on Monday night when Republicans balked at the extensions of various tax credits and preferential treatment for favored industries.

House Speaker Tim Moore said he remained confident in the measure. But a key Senate Republican already signaled the proposed 5 percent spending increase was too much and that significant changes were ahead in the Senate version of the budget.

MOORE’S TAKE: While some on the far left and far right of the chamber’s political spectrum are unhappy with parts of the bills, Moore said “most folks seems to be happy with it.”

“We’re working on a very pragmatic budget to fund the needs we have” and to allow for reasonable growth, Moore, R-Cleveland, said in an interview, adding that the measure funds “some critical needs that we’ve had to put off for a few years.”

Some Democrats say the measure doesn’t fund enough for education and that reducing revenues through tax cuts favoring the highest wage earners are to blame. The bill, however, would raise most teacher salaries by 2 percent next year and by more than 6 percent for those at the low end of the pay scale.

Moore said there are some lawmakers “that if you doubled education spending would say it’s not enough.” As for fellow Republicans who voted against the finance package, Moore said, legislative leaders are having conversations with them to see if “some tweaks that can be made where folks are happy with it.”

SENATE’S SWING: Senate Republicans hoping to pass their budget by mid-June have different priorities and don’t like the $1.1 billion proposed increase in next year’s budget.

“I think you’ll see a budget that’ll be more prudent, that won’t spend that much money,” said Sen. Harry Brown, R-Onslow, co-chairman of the Senate Appropriations Committee.

He expects the Senate will set aside more than the $400 million the House earmarked for two reserve funds - one for emergencies and the other for government building repairs. Brown said he also expects many of the tax credit extensions in the House budget to be removed from the Senate plan.

Brown also would like to eliminate a $200 million-plus annual transfer from the Highway Fund to the general operating fund. Much of the money has been used to pay for Highway Patrol operations, but critics say the funds should remain to help with road building.

The two chambers ultimately will work out a final plan for Republican Gov. Pat McCrory to consider.

MEDICAID’S MOVE: The budget proposal spends $748 million over two years to pay for projected increasing medical expenses and enrollment for Medicaid, the state-federal health insurance program for poor children, older adults and those with disabilities. Enrollment is expected to increase by 200,000 over the next two years, primarily due to the 2010 federal health care overhaul law, according to Rep. Marilyn Avila, R-Wake, a health budget-writer.

Rep. Verla Insko, D-Orange, complained about provisions she said would give new, wide-ranging authority to the Department of Health and Human Services to take actions to ensure Medicaid stays within its proposed $3.8 billion spending plan.

The directive appears to contrast with recent efforts by House and Senate Republicans to shift financial decision-making away from DHHS, either to medical providers, insurance companies or a governing board.

House health budget-writers said the provision doesn’t change what DHHS now does with Medicaid, and that the agency would be required to alert a proposed Medicaid oversight committee at the legislature about upcoming program changes it plans to make to avoid shortfalls.

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