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Senate tentatively approves $21B budget

Wednesday, June 18, 2008
(Updated Friday, July 11 - 12:27 pm)

RALEIGH (AP) — The North Carolina Senate on Wednesday tentatively approved a $21.4 billion state budget, a plan that would spend more on higher education than the proposal that cleared the House two weeks ago.

The Senate budget satisfies many concerns raised about the House budget by Gov. Mike Easley. But it still falls well short of offering the nearly 7 percent raise Easley wants for teachers.

Senate Democrats allowed a debate of a little more than an hour Wednesday before holding a vote. The budget was approved 33-16, and a final Senate vote will come Thursday morning.

Democrats cut off discussion after they turned away a handful of Republican amendments and before a single Republican was allowed to comment on the merits of the more than 200-page budget. One GOP amendment would have repealed a 2007 law giving counties the option to raise land transfer tax rates with voter approval.

"What we saw in there today was probably the worst example of how a democratically-elected representative body conducts business," said Senate Minority Leader Phil Berger, R-Rockingham. "Just the process by itself would be a reason to vote against it."

The budget would give $20 million more than the House to the University of North Carolina system to pay for the costs of students enrolling this fall, as well as $14 million to pay for faculty and graduate student recruitment and retention efforts and improvements to research funding.

Democratic leaders, who largely wrote the spending plan, said it doesn't let the state's slowing economy become an obstacle to preparing all students to succeed in a high-tech economy.

"I do believe that we are on the right course in North Carolina and we will continue to be on the right course," said Sen. A.B. Swindell, D-Nash, co-chairman of the Senate education subcommittee.

Several Republicans were expected to vote against the measure, but that won't be enough to scuttle the budget. Democrats hold a 31-19 seat advantage in the chamber. Following the second of two required votes Thursday, the Senate will negotiate with the House to present a compromise budget to Easley before July 1.

The Senate plan would spend $15.5 million more than the House. But the state's small revenue surplus motivated Democrats in each chamber to agree to raise year-to-year spending by only about 3 percent, compared with the more than 9 percent increase of the previous two years when the state had billion-dollar surpluses.

Like the House, the Senate budget includes an average 3 percent pay raise for public school teachers. Easley wanted raises of nearly 7 percent to help the state's teachers reach the national average salary before he leaves office in January. The Senate added a provision that could boost the raises above 3 percent if the state collects more tax money than it expects.

The Senate budget includes $41 million for Easley's signature More at Four education program, compared with the $23 million provided by the House budget. But that's still short of the $45 million that Easley requested in his budget proposal last month.

The UNC system would receive $68.6 million more than the House offered in its budget, achieved in part by the Senate's suggestion to delete a 1 percent spending reduction the House wants to make across most of the system's campuses.

The Senate budget borrows more than $670 million, or $120 million more than the House, for university buildings, four prison additions totaling 1,500 beds and other projects. Like the House, the Senate borrowing doesn't require statewide voter approval.

But the extra spending was balanced out by spending $34 million less than the House to help pay for skyrocketing school bus diesel fuel.

Both the House and Senate order state regulators to cut tens of millions more from a costly mental health program paid by Medicaid that provides non-medical care for patients living at home.

The Senate, however, would suspend new enrollment for the NC Health Choice insurance program for children in low-income families starting Sept. 1. The House proposed expanding it by another 10,700 children.

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