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N.C. budget trims Transportation Museum funds

RALEIGH — The state Senate budget set to be unveiled today keeps a House provision to fund the N.C. Transportation Museum at 50 percent for a year before requiring it to support itself.
The budget proposed by Gov. Beverly Perdue in February would have eliminated the state’s $1 million appropriation to the Spencer museum starting July 1.
Sen. Andrew Brock said the version drafted by legislators still would remove that funding, but it would give the museum a transitional year to work on ways to make up for it.
Brock, a Republican who represents Rowan and Davie counties, added that the museum would be given a $300,000 fund for emergency repairs and other urgent needs.
He also said the state might be able to avoid cutting the rest of the regular funding next year.
“There has always been a supplemental budget (between budget years),” he said. “Hopefully, we’ll have some extra money for that.”
Senate Republicans prepared Monday to reveal a North Carolina $19.4 billion budget proposal by pointing to what they call positives for public education and the recovering economy even with deep spending cuts that have Democrats including Perdue worried.
The budget proposal also would cut all North Carolina individual income tax rates slightly and try to simplify tax forms, a move they argue will create tens of thousands of jobs when combined with the expiration of temporary taxes.
The tax package, detailed in a document obtained by the Associated Press, says the GOP leadership wants to reduce the state’s three individual tax brackets by a quarter percentage point for at least the next two years.
The proposal also would exempt the first $50,000 of income generated by a small business for the same two-year period and changes the basis by which an individual’s income tax is calculated. A handful of tax credits and deductions also would be eliminated.
The tax changes also would allow a penny sales tax increase and an extra 2 or 3 percent to every individual and corporate income tax bill set in 2009 to expire on time, losing $1.3 billion in revenues in the coming fiscal year.
GOP senators put the emphasis of their message on the adjustments made to the public schools and the University of North Carolina system. The changes mean Senate Republicans set aside more money for education than the House plan approved three weeks ago.
Overall, however, the measure still spends roughly $500 million less in the next fiscal year compared to the $19.9 billion Perdue offered in her February budget proposal and less than she did on public education, which comprises around 60 percent of each year’s spending plan.
Like the House plan, which spent $19.3 billion, the Senate budget makes large cuts because Republicans wants to let a temporary 1 cent sales tax increase expire, at a cost of $1.1 billion.
Perdue kept three-quarters of the penny in place.
Brock, who co-chairs the Appropriations Subcommittee on General Government and Information Technology, said subcommittee chairs were given the authority to evaluate each item in the budget.
“I went through it line by line, asking ‘Where can we save money?’ ” Brock said. “We’re trying to make government as efficient as possible.”
Sen. Neal Hunt, R-Wake, co-chairman of the Senate Appropriations Committee, said he preferred not to talk about the size of the overall cuts for the public schools and the UNC and community college systems when compared to what would have to be spent to keep services at current levels.
That difference would be more than $1 billion.
“I’m not big talking about percentages,” Hunt said. “We’re talking about results.”
After the full Senate approves its budget next week, House and Senate members are expected to negotiate differences and present a final plan to Perdue in June for her approval. She’s been critical of the House proposal that fellow Democrats have said would eliminate more than 18,000 positions. The GOP said that number is overstated.
In meetings with reporters and newspaper editorial boards, Senate Republicans discussed their proposal to hire more teachers in early grades while cutting more funding for teacher assistants than the House did. Money for teacher assistants in grades 1-3 would be eliminated, compared to grades 2-3 in the House proposal.
For education funding, Brock said legislators are shifting priorities away from administration and other areas and toward classroom teachers.
“Do we have bigger class sizes with a teacher assistant, or do we have smaller class sizes without a teacher assistant?” Brock said. “Those are the things we’re trying to balance out.”
The Senate would hire some 1,400 more teachers in grades 1-3 to reduce the teacher-student ratio for those classrooms from the current 1-to-18 to 1-to-17.
Hunt said it’s the first step in a goal to reduce the ratio to 1-to-15.
The second year of the two-year budget also will set aside a couple hundred million dollars for a pay plan that will reward teachers for student performance, Hunt said. The state would hire an outside consultant next fiscal year to help develop the merit-pay plan, he said.
Senate Republicans argue their plan will lead to better academic outcomes for students, citing studies that show student performance improves when they are in smaller classes with a quality teacher.
Senate Minority Leader Martin Nesbitt, D-Buncombe, said the GOP’s budget will move North Carolina backward on education and lay off thousands.
“Republicans aren’t reforming education, they’re dismantling our public schools,” Nesbitt said in a prepared statement. “Truth is, the GOP budget will cut from every classroom in North Carolina.”
Hunt said a package being incorporated will include cuts to the corporate and individual income tax rates and a tax break for small businesses on their $50,000 of income.
The House budget had set aside $230 million for the coming year for such a package but didn’t provide details.
Six budget subcommittees will review the GOP plan today but won’t vote.
The full appropriations committee will take amendments Wednesday. The first of two required floor votes is expected May 31, said Senate leader Phil Berger, R-Rockingham.

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