NC House Passes Tax-Cutting $25+ Billion Budget w Veto-Proof Majority

RALEIGH – The N.C. House of Representatives passed it’s version of the biennial budget Thursday afternoon, doing so by a veto-proof margin of 77-42. The Senate passed its budget earlier this summer; now the two chambers must reconcile their differences to concur on a final version to send the governor.

At $25.7 billion the House budget is one of the biggest ever, thanks to record surplus tax revenues and massive infusions of federal funds related to pandemic relief.

The top line for North Carolinians is that both budgets would lower their personal income taxes, raise the standard deduction, and reduce corporate income taxes too. The House version would drop personal tax rates down to 3.99%, and raise the standard deduction, such that a median income family would save an extra $330 on their state tax bill.

The plan addresses teacher pay, amounting to an average bump of 5.5% for teachers over the two years, and gives raises and bonuses to state employees as well.

There is a boat-load of spending on capital and construction projects for governments, schools, and disaster mitigation – about $9 billion in all.

Much to Gov. Roy Cooper’s chagrin, there are a few policy items within the bill, too. Legislation to limit the governor’s emergency powers, to combat indoctrination in education, and other Republican policy preferences made their way into the budget.

It’s far from a done deal, however. Next week the House and Senate will appoint conferees to craft a unified compromise budget that both chambers concur can with. At that point it goes to the governor, who has a habit of vetoing budgets that don’t include Medicaid expansion and profligate spending. Actually, the state is still operating on a continuing budget because Cooper refused to sign the last one, and Republicans refused to capitulate to their his political posturing.

Even though the House passed this budget bill with veto-proof majorities, that’s no guarantee the concurrence will receive the same strength of support, or that such Democrat yes votes would hold up in the face of a Cooper veto and Democrat arm-twisting.

Still, being that teachers never received a raise last year because of Cooper’s veto, and the budget containing so much spending — politicians like spending — it seems more likely that Cooper begrudgingly sign the budget while issuing extra stern talking points about the need to expand Medicaid and/or pay teachers $1 million a year.

Either way, a few more weeks of budget haggling is on the horizon. A key takeaway is that the budgeting process is not the dire situation many feared could be the case about 18 months ago. Instead the government’s coffers are overflowing; to the tune of about $6.5 billion in over-collections in the next two years.

Check out all the details in the  650+ page bill here.

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