- Associated Press - Wednesday, May 18, 2016

RALEIGH, N.C. (AP) - A rare nearly unified House gave tentative approval Wednesday to the Republicans’ recommended adjustments to the second year of North Carolina’s two-year budget that offer teachers and state employees pay raises and give most tax filers a break.

Two-thirds of the House Democrats joined all GOP members voting as the $22.2 billion legislation passed 103-12. A second, final vote was expected Thursday before the measure heads to the Senate for consideration.

Republican budget-writers benefited from surplus tax collections and Medicaid savings to fund the permanent salary raises, place $300 million more in the state savings account and put $164 million aside for government building repairs and renovations.

“This budget is responsible by that it does fund our critical needs,” said Rep. Nelson Dollar, R-Wake, senior chairman of the House Appropriations Committee. “It does plan for the future and it most assuredly moves our state forward.”

House Minority Leader Larry Hall, D-Durham, criticized the plan for not going far enough with pay raises and blamed spending limits by GOP legislators. House and Senate Republicans have already agreed on capping spending growth on a pace linked to inflation and population increases. “We artificially starved ourselves,” Hall told colleagues.

Hall voted no, but a majority of Democrats decided to vote in an election year for the adjustments, which also included an increase in the standard deduction - $250 to $500 depending on one’s filing status - annually for the next four years. A higher deduction expands how much income isn’t subject to taxes. Most of these tax breaks would go to people making less than $100,000 annually, a legislative economist said.

“Overall, the document does a lot of good things,” said Rep. Marvin Lucas, D-Cumberland, who voted for the plan Wednesday. “Yes, we’ve done well, but the greater challenge is to do better.”

Wednesday’s debate lacked most of the partisan acrimony of previous years under Republican rule of the General Assembly and lasted less than four hours. The most contentious debate happened between GOP members when floor amendments were considered.

A year ago, the House budget bill initially received 94 votes, with 11 Republicans voting no.

“We’re very pleased to see a strong bipartisan vote,” House Speaker Tim Moore, R-Cleveland. “We did the things voters wanted us to do” in the budget, he added.

House Republicans emphasized teacher raises for veteran instructors after efforts the past two years by legislative leaders and GOP Gov. Pat McCrory to increase the minimum entry-level teacher salary to $35,000. Base salary tiers for teachers with at least five years of experience would increase from 2 percent to 5 percent this fall in the House bill. Early career teachers and those with at least 25 years of experience also would get $1,000 bonuses.

The House bill would give most rank-and-file state employees 2 percent raises along with $500 bonuses. Most state workers only would have received bonuses in McCrory’s budget proposal last month. The House also would give retirees a 1.6 percent pension increase.

The House plan located $60 million to help treat the mentally ill and substance abusers - $30 million that was taken away from regional managed-care agencies last year and $30 million to pay for recommendations by a McCrory study commission.

The House proposal also spends $25 million to hire new literacy coaches designed to help early grade students in the lowest-performing schools reach grade-level reading skills as part of the Republicans’ Read to Achieve program. But the state would forgo the planned hiring of additional first-grade teachers this fall to reduce student-teacher ratio levels.

Representatives approved an amendment by Rep. Gary Pendleton, R-Wake, that would prevent the Department of Transportation from eliminating filled positions or outsourcing work until DOT produces a report by next winter showing what kind of cost savings restructuring would create. The chamber defeated an amendment by Rep. Susan Fisher, D-Buncombe, that would have ended a pilot program to let two virtual charter schools operate in the state.

Senate Republicans, who hope to get their version of the budget done in a couple of weeks, already have set the stage for anticipated negotiations later this session. Earlier Wednesday the Senate Finance Committee recommended raising standard deductions to the same level as the House wanted by 2017.


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