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NC Senate gives final OK to budget deal

Highlights of proposed 2015-17 NC state budget

RALEIGH (AP) — Highlights of the final North Carolina budget agreement as proposed in legislation and related “money report” crafted by House and Senate leaders. The Senate gave final approval Tuesday to the two-year spending plan. The House was expected to debate the bill starting Thursday:

EDUCATION

• Provides $377.1 million— an amount comparable to last year — annually to school districts to hire teacher assistants, with a new prohibition on shifting the funds to spend on other education needs.

• Restores annual funding for school districts to operate driver’s education programs, with proceeds coming from civil fines and forfeiture fund in 2016-17. School districts can continue to charge fees of up to $65 per participating students. A legislative oversight committee will recommend next year on program improvements.

• Increases money for grants to children of low-income families to attend private schools by $14 million over two years.

• Expands summer-reading camps in public schools to help first- and second-graders at risk of academic failure, at a cost of $20 million annually.

• Reduces class sizes in first grade in the 2016-17 school year, spending nearly $27 million.

• Provides $53 million more over two years for public school textbooks, digital learning and $14 million more for broadband and Wi-Fi access.

MEDICAID & HEALTH

• Provides $796 million over two years for Medicaid services based on increased enrollment and demand for services.

• Sets aside $225 million over two years to prepare for the transition of Medicaid away from a fee-for-service system to one in which managed-care entities receive a set monthly payment per patient. The Medicaid overhaul will be contained in separate legislation.

• Increases the fee charged by the state Medical Examiner’s office to perform an autopsy from $1,250 to $2,800. Other funds are allocated to modernize the office.

• Directs $15,000 payments to hundreds of people determined as victims of North Carolina’s past eugenics program. The first payments to qualifying patients who were sterilized occurred last fall. The payments come from $10 million previously set aside.

• Sets aside $49.9 million from the sale of the old Dorothea Dix state mental hospital property into a special fund that would need legislative approval to be spent. The fund will be used to increase short-term mental-health services in the state. The Department of Health and Human Services is directed to propose spending $25 million from the fund to create 150 new slots for behavioral services.

• Prevents state funds from being spent on renewing existing contracts or entering into new contracts for “family planning services, pregnancy prevention activities or adolescent parenting programs with any provider that performs abortions.” It does not apply to Medicaid or the State Health Plan.

• Increases laboratory testing fee for newborn screenings from $19 to $24.

TRANSPORTATION

• Ends annual $216 million transfer from the Highway Fund to the state’s general operating fund, meaning more money available for road building and other transportation needs.

• Increase funding for bridges, road resurfacing, pavement preservation and secondary road maintenance by $189 million this year alone.

• Increases state grants for public airport development and unmanned aircraft systems by $17 million this year and $12.5 million next year.

SALARIES & BENEFITS

• Gives $750 bonuses for all state employees and teachers by December. Minimum salaries for early-career teachers are going up from $33,000 to $35,000, while teachers will get their experience-based raises.

• Offers 3 percent salary increases for sworn Highway Patrol officers, with minimum trooper salaries growing from $35,000 to $36,050.

• Gives $38 million over two years for higher correctional officer salaries, $30 million for community college salaries and $38 million for Gov. Pat McCrory’s administration to make targeted salary increases.

• No cost-of-living raises for state retirees.

TAXES & FEES

• Increases Division of Motor Vehicle fees by and large by from 25 to 33 percent, generating $227 million in revenues over two years. Renewing an eight-year driver’s license goes from $32 to $40, for example.

• Increases funds in a grant program for film, television and commercial productions from $10 million to $30 million, with increased caps on the grants for individual productions.

• Restores version of historic preservation tax credits, which expired at the end of 2014.

• Phases in expansion of a new method to calculate corporate income tax over three years that favors in-state manufacturing companies that are selling most of their goods elsewhere.

• Reduces personal income tax from 5.75 percent today to 5.499 percent starting in 2017. The corporate rate already will fall from 5 percent to 4 percent based on a 2013 tax law.

• Increases standard deduction for individual income tax returns from $250 to $500, depending on filing status.

• Expands sales tax base to cover transactions involving the installation, repair and maintenance of tangible personal property such as automobiles and appliances. The local government share of these revenues will benefit 79 counties that would have benefited under an alternative proposal from Senate Republicans. The other 21 counties will not lose funds.

• Allows all municipalities to raise its annual vehicle tax from current $5 to $30. Some cities and towns with public transportation systems already could collect $10.

OTHER AGENCIES & PROVISIONS

• Creates a new Department of Information Technology and Department of Military and Veterans Affairs, as requested by Gov. Pat McCrory.

• Moves all state parks, state aquariums, the North Carolina Zoological Park and state Natural Sciences Museum from Department of Environment and Natural Resources to an expanded Department of Natural and Cultural Resources, also requested by McCrory. The Department of Environment and Natural Resources would be renamed the Department of Environmental Quality.

• Eliminates $737,000 for the Hunt Institute at the University of North Carolina at Chapel Hill, named for former Gov. Jim Hunt.

• Creates “Animal Shelter Support Fund” that receives public and private funds that would reimburse local governments with matching funds for animal shelter operating expenses when the shelter’s registration is revoked or unforeseen disaster occurs.

• Allocates $3 million annually for dredging needs at Oregon Inlet on the Outer Banks. Locates additional dredging funds statewide from a portion of the state gasoline tax.

• Gives $10 million annual from national tobacco settlement proceeds to Golden LEAF foundation.

• Installs vehicle cameras on State Highway Patrol cruisers currently without them, at a cost of $6 million.

• Creates new “governmental budget transparency” initiative that posts online for the public budgeted amounts and actual expenditure and direct state Chief Information Officer to help local governments and school districts do the same.

• Bars lottery retailers from accepting “public assistance funds” from potential players to purchase tickets.

• Allows State Board of Education to consolidate two or more contiguous county school districts or units within a county, with the ability of the General Assembly to disapprove the merger.

• Directs study and creation of deferred admission program that would guarantee low-performing students accepted to a University of North Carolina system school can attend that school after receiving an associate degree at a community college.

• Increases number of coastal jetties allowed on North Carolina coast from four to six, with two permits issued only for New River Inlet in Onslow County and Bogue Inlet between Carteret and Onslow counties.

• Expands assistance to manage and revive North Carolina oyster industry.

— Mandates DNA testing for more people arrested to now cover all violent felonies.

• Abolishes three specific Special Superior Court judgeships.

• Provides at least $7.25 million this year to court system for technology improvements, interpreters and expert witnesses and other operating funds.

• Gives $200,000 to State Board of Elections to carry out elections overhaul law that in part directs photo identification to vote in person starting in 2016.

• Gives an additional $4 million annually to the General Assembly to pay for “current and pending litigation costs.” Legislative leaders have hired private attorneys to help defend the 2011 redistricting maps and 2013 elections overhaul law in court.

• Provides $50,000 to the State Ethics Commission to help pay for an unidentified “independent investigation” during this fiscal year.

• Gives the Department of Public Safety up to nearly $3.5 million over two years to technology designed to deter the illegal access of cellphones by state prisoners.

RESERVES & GRANTS

• Reserves $600 million for the state’s emergency account and for building repairs and renovations.

• Provides $2.5 million in grants for police body cameras.

• Offers $6 million in grants annually for after-school program quality improvement efforts.

• Creates $2 million challenge grant for the creation of a North Carolina campus of the Western Governors University, an online school.

RALEIGH (AP) — The North Carolina state budget deal negotiated by Republicans got some Democratic votes before it cleared the Senate on Wednesday.

Three rural-area Democrats joined Republicans in giving the two-year spending plan their final approval by a vote of 37-13.

Tuesday’s preliminary vote fell strictly along party lines, but Sens. Ben Clark, D-Hoke; Jane Smith, D-Robeson; and Erica Smith-Ingram, D-Northampton, switched their “no” votes to “yes.”

None of them spoke during Wednesday’s brief debate, although Smith-Ingram said on the floor Tuesday that while there were many things she liked in the budget, she hadn’t had time to read it completely. Democrats had complained Tuesday of the quick turnaround: The actual text and related “money report” was made public late Monday.

The 429-page budget bill also contains a new sales tax arrangement that aims to direct more funds to dozens of small or rural counties.

The House was expected to hold their two required votes on the compromise Thursday evening and early Friday. The bill’s ultimate stop would be the desk of Gov. Pat McCrory, who would be asked to sign the bill quickly before a stopgap spending measure expires Friday.

McCrory, a Republican, told The Associated Press last weekend he was concerned about sales tax changes, particularly the expansion of the items subject to the tax to cover repairs, maintenance and installations. He and a small business group considered the expansion a tax increase.

The North Carolina chapter of conservative-leaning Americans for Prosperity praised the budget Wednesday, particularly for other tax reductions and for what it considers restrained government spending. State Director Donald Bryson said while the group had reservations about the sales tax changes, it was pleased with the refusal of lawmakers to extend renewable energy tax credits beyond this year.

The North Carolina Justice Center, which advocates for the poor, urged supporters Wednesday to call on McCrory to veto the bill because of “fiscally irresponsible” tax cuts and the failure of lawmakers to spend more on education, affordable housing and infrastructure.

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