Senate Republicans release first North Carolina budget details

  • Posted: Monday, May 20, 2013 1:04 a.m.

RALEIGH (AP) — The Republican-led Senate offered details Sunday evening of the chamber’s North Carolina budget proposal for the next two years, a spending plan that the Senate’s leader said would absorb still-spiraling Medicaid costs and create a new state division focusing on rural economic development.

The spending plan would spend $20.6 billion for the year starting July 1, or essentially what GOP Gov. Pat McCrory wanted to spend in his budget two months ago.

Numbers provided by Senate leader Phil Berger show spending in major categories would be mostly flat compared to the current year, except for health and human services and natural and economic resources. Medicaid spending by the state would grow 11 percent to nearly $3.5 billion.

The General Assembly already is expected to formally approve more money for Medicaid to spend this fiscal year to deal with yet another shortfall in the health insurance program for 1.5 million residents, mostly poor, disabled and elderly residents. A provision in the 413-page Senate budget directs the McCrory administration to come up with a Medicaid reform proposal by early next year.

Senate Republicans also want to shift the State Bureau of Investigation from the oversight of Democratic Attorney General Roy Cooper to an agency under McCrory’s purview. The budget proposal released later Sunday shows a $33 million transfer from the Department of Justice, where the SBI now resides, to the Department of Public Safety, led by McCrory appointee Secretary Kieran Shanahan.

Cooper scheduled a news conference Monday — the same day Senate budget subcommittees were expected to meet to consider the spending plan — with law enforcement to call for the SBI “to remain independent of the state’s executive branch.” Cooper’s office blocked successfully a previous effort by Republicans two years ago to move the SBI to the Department of Public Safety.

Senate Republicans planned to hold their own budget news conference Monday. It’s expected the full chamber will hold the first of two required floor votes Wednesday. The House will pass its own version. The two chambers are aiming by June 30 to present to McCrory a final plan they hope he’ll sign into law.

The Senate proposal would raise spending by 2.3 percent compared to what’s authorized this year and also lays the groundwork for the Senate tax overhaul proposal, a Berger news release said. Berger said last week he didn’t expect the actual tax plan — including lower income and sales tax rates — to be inserted in the budget.

“This budget stands in sharp contrast to the failed attempts of previous leaders to tax, spend and borrow their way to prosperity,” Berger said in a clear reference to Democrats, who controlled the legislature for more than 100 years before Republicans did in 2011. The legislature passed budgets over the vetoes of Democratic Gov. Beverly Perdue in 2011 and 2012.

Berger’s office said the budget would spend $54 million on many public school reform efforts that Berger has sought, as well as $10 million for a merit-pay system for schoolteachers in the 2014-15 fiscal year. State employees wouldn’t receive a pay raise next year.

The spending plan also would eliminate an annual spending cut for local school districts in which they’re expected to return a portion of money — recently it’s been in the hundreds of millions of dollars — they receive as a cost-saving measure. The change, the news release said, would “make the education budget process fully transparent.” It wasn’t immediately clear, however, how the public school changes could affect classroom employment.

Senate Republicans would create a new “Rural Economic Development Division” within the Department of Commerce and put $55 million over two years in a new “Rural Infrastructure Authority.” Operating funds for the nonprofit N.C. Rural Economic Development Center would be eliminated, or a loss of about $16.7 million annually.

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