Constituent Update
From the Office of N.C. Sen. Austin M. Allran
42nd Senate District
RALEIGH
The Senate budget was the hot topic last week at the North Carolina General Assembly. Senate Democrats unveiled a $20.9 billion budget proposal Monday night after drafting it behind closed doors out of sight of taxpayers, the press and most senators.
Senate Republicans argued that there should have been an open and deliberative budget process and suggested that Senate Democrats delay the budget vote until next week so the public and all Senate members would have an opportunity to review the 347-page document.
Democratic leaders ignored this call.
Senate Republicans (including me) overwhelmingly did just that for a number of reasons. While North Carolina families are freezing their budgets during these difficult economic times, the Senate increases the government budget by nearly $1.5 billion, a jump of over 7 percent from the amount being spent this fiscal year.
Senate Republicans believe sound fiscal policy during a time of economic slowdown necessitates spending cuts rather than spending increases, since spending increases will require increases in your taxes.
As for taxes, the Democratic budget includes unknown tax increases referred to as “tax adjustments” totaling more than $1 billion for the biennium. Democrats would not provide details on what taxes were being raised. Senator Bob Rucho (R-Mecklenburg) said that voting for such a budget was “buying a pig in a poke if we don’t know where these revenues are coming from.”
The budget also raises fees (taxes) by another $50 million annually. Republicans argued that tax and fee increases will further damage the economy and cost jobs.
There were also concerns that Democrats were making unreasonable assumptions about state revenue growth for the second year of the biennium with a 5-percent revenue growth estimate. Senate Republicans also pointed out that the budget relies on temporary federal bailout money to fund ongoing expenses making future tax increases certain.
This is the way I would sum up the budget, from a “money” standpoint:
1. For the ‘09-’10 fiscal year, there is a recurring shortage of funds of $1.7 billion. It is being filled with non-recurring funds; specifically, federal bailout funds.
2. For the 2010-2011 fiscal year, there will be a projected shortage of $1.3 billion.
3. $3 billion in non-recurring (bailout) funds are being used to pay recurring expenses in the two-year budget.
4. The structural deficit, which was already $1 billion per year, is growing to $1.7 billion.
Despite most Republican senators’ opposition to the budget, with Democrats in control of the Senate, the budget passed Thursday.
In other news, the House is considering legislation that would permit cameras on school buses to catch drivers who pass stopped buses. The bill is named for Nicolas Adkins, a Rockingham County high school student who was killed by a motorist while trying to board his school bus.
A bill to bail out the bankrupt State Health Plan narrowly passed the House Appropriations Committee last Wednesday. This legislation will cost taxpayers $730 million over the next two years and raise premiums 10 percent per year for dependents of state employees. The House may consider the bill on the floor next week.
Finally, the Senate defeated legislation that would allow the North Carolina to fund only one school system per county. The legislation would have effectively forced consolidation of multiple school systems, unless the local systems made up the loss of state funding.
.(JavaScript must be enabled to view this email address)
