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| House, Senate pass '06 budget bill with more for education, less taxes THE ASSOCIATED PRESS Friday, July 7, 2006
RALEIGH An $18.9 billion state spending plan headed to Gov. Mike Easley yesterday after the General Assembly gave final approval to a budget that cuts some taxes, spends more on education and sets aside money for the next natural disaster. In approving the budget bill for the second time in as many days, the House voted 82-31 and the Senate 31-15 to spend nearly 10 percent more than last year, although more than $560 million of the $1.7 billion increase is set aside in reserve. The rest goes toward large state employee and teacher raises, $206 million in pay-as-you-go construction and $163 million for more than 27,000 new students expected this fall. The Democrat-led legislature also used more than $160 million to begin reducing two "temporary" tax increases first approved in 2001 and extended twice. A big budget surplus for the previous fiscal year - the largest as a percentage of the budget in at least 35 years - gave budget-writers the confidence to begin phasing out a half-penny increase in the sales tax and a 0.5 percent increase in the individual income tax. Debate was brief yesterday in both chambers. A day earlier, Republicans complained in floor sessions that the budget moves the state closer to another shortfall by using more than $400 million in one-time revenues for permanent spending programs. "There's no question ... that there are certainly a number of good things in this budget," Rep. Nelson Dollar, R-Wake, said yesterday, but "those are one-time funds. We are talking about a recurring structural deficit." Easley hasn't said yet whether he will sign the bill into law, but he praised the budget - especially its education programs - when it emerged from final negotiations late last week. "So far, it appears to be the most impressive budget with the least amount of pork that has been passed in 20 years," an Easley spokeswoman, Sherri Johnson, said yesterday. Education programs will get $943 million more overall compared with the year before, including money for an average 8 percent raise for teachers and a pilot program to give extra money to hard-to-recruit math and science teachers. Community-college faculty and professional staff would get a 6 percent raise, with a 2 percent one-time bonus. University workers also would receive a 6 percent raise, with $5 million set aside for professor-recruitment efforts. Easley also got the money he wanted for at-risk students, poor school districts and 100 middle-school literacy coaches. And school districts no longer will have to cut a total of $44 million annually in state money as they have been ordered to do since 2003. "This is the best public-schools budget we have seen in a decade," said Katherine Joyce with the N.C. Association of School Administrators, which had pushed for the end of the discretionary cut. The education spending increase doesn't include $425 million projected to be generated by the new lottery. All of that money is to be earmarked for education. The budget also provides $27.4 million to help counties keep their Medicaid costs at 2005-06 levels, at least $75 million to push ahead mental-health reform and more to hire more prosecutors, judges and court officials. The bill also authorizes $672 million in debt through mid-2010, in part to expand the N.C. Museum of Art, build a public-health laboratory, a secondary-data recovery center, a Central Prison hospital, and replacements for mental hospitals in Morganton and Goldsboro . Most consumers would see the sales tax that they pay drop from 7 percent to 6.75 percent starting Dec. 1; the highest individual income-tax bracket would fall from 8.25 percent to 8 percent. Legislators have said they want to eliminate the rest of the temporary taxes next year. Legislators also created a $20 million fund to give Easley immediate access to cash after a hurricane. This story can be found at: http://www.journalnow.com __________________ Lori Ann Harris PO Box 26974 Raleigh , NC 27611 919-832-2648
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