The Senate gave preliminary approval to a $25.7 billion budget proposal Thursday, with its Republican leader rejecting criticism that it shortchanges children, teachers, and government retirees.
Four Senate Democrats joined all the chamber’s Republicans in approving the proposal in a 32-18 vote. The Senate must take another vote before sending the budget to the House. The House will write its own version and the two chambers will get together on a compromise before sending the spending plan to Gov. Roy Cooper.
Republicans remained united in shrugging off without votes eight changes Democrats proposed. Among the Democrats’ proposed amendments were spending more to meet North Carolina’s constitutional obligation provide a “sound, basic education” to all students, and giving teachers pay raises of 10% over two years rather than the 3% over two years as Senate Republicans proposed.
“A three percent raise over two years is a slap in the face,” said Sen. Michael Garrett, a Greensboro Democrat. “It is beneath the dignity of this body.”
He and other Democrats said the state could afford to spend more in some areas. The Senate proposal leaves more than $3.6 billion unspent.
“We have billions in unallocated state revenue, so don’t tell me, don’t tell our teachers, don’t tell our students we can’t afford to invest in our kids’ future,” Garrett said.
Throughout the week, Republican budget writers have pointed out that they have adhered to limits on budget increases that equal population growth plus inflation.
But Thursday, Senate leader Phil Berger said that when all sources are considered, “the amount of money being spent in this budget is unprecedented.” Revenues include North Carolina tax and fee collections and more than $4.8 billion in federal rescue money.
Democrats’ spending proposals would create long-term obligations that risk returning the state to budget deficits, Berger said. “We’ve seen this philosophy before, and it doesn’t work.”
The Great Recession drove North Carolina’s and other states’ budgets into deficit.
North Carolina started this year with more than $5 billion in unspent money, largely because the Republican-led legislature and Democratic Gov.
Roy Cooper failed to agree on a comprehensive budget for two years.
The latest estimate from economists working for the state is that North Carolina is going to collect $6.5 billion more in tax revenue than anticipated over the next two years.
Sen. Dan Blue, the Democratic leader, said he wants fiscal responsibility “but we need to have compassion for our communities all over this state and we need to meet the challenges that the confront this state.”
Legislators have described the Senate budget as an early step in a multi-step process toward getting to a spending plan.
“I just hate for us to miss a golden opportunity to catapult our state ahead of not only the other states with which we compete but other places in the world,” Blue said.
Sen. Wiley Nickel, a Cary Democrat, wanted to eliminate the corporate income tax cut that’s in the budget and use the money the state would continue to collect to allow all 3- and 4-year-olds to attend NC Pre-K. The budget starts a phase-out of the 2.5% corporate income tax.
Sen. Joyce Waddell, a Charlotte Democrat, argued for a 2% cost of living adjustment for government retirees. “Think about retirees. Many of you here are retired, or close to it. Just look around,” she said to senators’ laughter.
Public sector retirees have lost 20% of the value of their pensions since 2008, Waddell said. “I hope with the surplus you have in this budget you will do something about it,” she said. “If you don’t, it’s a shame, shame, shame.”
Berger said the budget meets state obligations to retirees. People in his district who lost their pensions when textile companies went bankrupt would have to pay those government retiree cost-of-living adjustments, Berger said. “That’s utterly unfair,” he said.
The Senate budget is larded with special provisions that seek to limit the governor’s powers in an emergency and the attorney general’s abilities to join or settle some lawsuits.
Republicans opposed some of the limits on businesses and public gatherings that Cooper imposed during the COVID-19 pandemic. The mask mandate was an issue in last year’s campaign. Cooper’s Republican challenger was against it.
Masks remain a polarizing issue, with the state House passing a bill Wednesday that would have local school districts decide whether children at school should continue to wear masks. Cooper’s current executive order requires all students at public and private schools to wear masks indoors, NC Policy Watch reported. The 66-44 House vote was largely along party lines, with three Democrats voting with the Republican majority.
The budget imposes time limits on executive orders during states of emergency and requires the governor to get Council of State concurrence. The Council of State is comprised of statewide elected office holders and is majority Republican.
The attorney general would be prohibited from agreeing to consent agreements or lawsuit settlements to which legislative leaders are a party unless the lawmakers agree. The Senate passed a bill addressing this issue in April with a 28-21 vote, short of a veto-proof margin. Republicans are angry about a legal settlement last fall that extended the absentee mail-in ballot deadline from three days to nine days after Election Day.
The attorney general would need approval from a Council of State majority to join out-or-state or federal lawsuits where the state or state agency is not seeking damages.
Attorney General Josh Stein, a Democrat, has joined lawsuits in the past challenging former President Donald Trump and his administration.
Earlier this year, Stein’s spokeswoman said in an email that the Republican bills giving legislative leaders veto power over consent judgments and legal settlements are unconstitutional.
In an interview this week, Gerry Cohen, a former legislative counsel, said he doesn’t think that getting approval from legislative leaders is something legislators can require.
“The Speaker and the Pro Tem can present their arguments to the judge,” he said. “I think that would be up to the court to decide what to do about that.”
Even before Cooper started his first term, legislative Republicans started trying to strip him of his appointment powers and elections oversight. Court battles helped shape Cooper’s first few years in office.
The budget provisions requiring Cooper to seek Council of State approval for executive orders in emergencies is “a naked partisan grab because Cooper is a Democrat,” said Vanessa Zboreak, an assistant professor at the Elon University School of Law.
“The legislature can’t write a law that gives itself executive power or write a law that overly intrudes on the function of the executive branch,” Zboreak said in an interview this week.
The provision requiring legislative leaders to okay consent judgments “is going to run in to serious problems,” she said.
“It’s over-reach,” Zboreak said. “It’s giving the legislature too much power to stop the action of the executive branch.”
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