- Associated Press - Wednesday, May 29, 2019

RALEIGH, N.C. (AP) - The North Carolina Senate is set to vote Thursday on the Republicans‘ two-year budget proposal that would give raises to state employees and slash corporate franchise tax rates, and could relocate over 2,000 state positions in Raleigh to a rural county.

The GOP proposal, which would spend $23.9 billion in the fiscal year starting July 1, was quickly approved Wednesday by three Senate panels, before the first of two required floor votes.

Senate passage this week will be another step toward implementing the next government spending plan. House Republicans passed a competing plan four weeks ago. The two chambers will negotiate a final plan and present it to Democratic Gov. Roy Cooper, who has already criticized both GOP plans for failing to do enough for public schools and for leaving out Medicaid expansion. A veto would set the stage for a showdown with Republicans.

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Senate GOP leaders emphasized proposed 5% pay raises for state employees over two years, $4.8 billion over ten years for public school construction and $1.1 billion more in the state emergency fund by next year for the next hurricane or recession.

The budget “takes care of state employees, I think it puts money away in the rainy-day fund for the future of the state, and it also gives money back to the citizens of this state,” said Senate Majority Leader Harry Brown, an Onslow County Republican and budget-writer.

Standard deductions for individual income tax filers - amounts earned not subject to any tax - would increase slightly in 2021 and corporate franchise tax rates would plunge more than 50% over two years in the Senate plan. However, soon-to-be owners of plug-in vehicles would have to pay more fees to compensate for gasoline taxes toward road maintenance they don’t pay.

Senate Minority Leader Dan Blue of Wake County called the GOP budget “anemic at every level” and proposes “quick fixes for chronic problems in North Carolina.”

Senate Republicans, who have been more apt to place significant policy alterations in their budget bill, did the same this year. A provision would permanently increase the amount of money the North Carolina Education Lottery can spend on advertising from 1% of revenues to 1.5%. Changes to lottery advertising limits have been a recurring fight in the legislature.

Another section would delay enforcement by one year of revised animal waste permit procedures for livestock farmers approved by Cooper’s environmental department. Scheduled to take effect in October, the rules cover the monitoring of hog waste pits and other storage structures, which have gained recent attention with lawsuits filed against farmers by neighbors who complain about the stench.

The budget bill also would stop an effort by the Cooper administration to move Department of Health and Human Services offices from the old Dorothea Dix Hospital campus to another Raleigh location. Under a lease-back agreement, most of the Dix workers must leave the Dix campus by 2025.

Instead, the budget directs that the Dix campus, currently with 2,300 department employees, would be relocated northwest in Granville County, an hour away, and authorizes the state to spend $250 million to construct new buildings there. Within hours of the budget release Tuesday, Granville County’s manager wrote to Cooper, legislative leaders and DHHS Secretary Mandy Cohen offering to donate acreage in a new business park for the project.

Sen. Brent Jackson, a Sampson County Republican and one of the chief budget-writers, said Wednesday he proposed relocation because rural areas could benefit from the job creation.

“I just want to get it out of Raleigh,” Jackson said. “We have areas adjoining Raleigh that are really depressed economically … I just think we need to explore these opportunities.”

The House and Senate already affirmed in their respective budgets an earlier plan by Cooper’s administration to move the state Division of Motor Vehicles headquarters from Raleigh to Rocky Mount. But the Granville proposal surprised DHHS. Jackson said the governor’s office wasn’t consulted on the idea. Cooper’s office had no comment Wednesday.

The State Employees Association of North Carolina is against the move. Opponents say it would result in experienced workers losing positions because they’re unable to make a long commute.

“There is a reason that state government is in a central place,” Blue, who also opposes the relocation, said in an interview.

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