May 10, 2017
NCGA Week in Review
Late Tuesday night, the Senate released its budget proposal for the 2017-19
biennium. In a
on Tuesday, Senate President Pro Tempore Phil Berger (R-Rockingham) noted
that the budget, “delivers nearly $1 billion in tax relief to the middles
class and our state’s job creators, ensures 99% of taxpayers pay less or no
state income tax, increases teacher pay, generously funds our public
schools and helps rebuild communities devastated by Hurricane Matthew – all
whole saving for a future rainy day.” The Senate reviewed
SB 257: Appropriations Act of 2017
in committee meetings today and it will be sent to the floor for votes
tomorrow and Friday. Once the SB 257 is approved by the Senate, it will
head to the House. This year, House and Senate budget writers have worked
closely together and expect final negotiations to be smoother than prior
years. According to House Rules Chairman Rep. David Lewis (R-Harnett), the
legislature plans to send the budget to the Governor by June 15.
Senate Budget Proposal Highlights
SB 257 proposes a 2.5% spending increase from last year, with total
spending equal to $22.9 billion. Here’s a glimpse at the Senate’s
$150 million appropriated to disaster relief assistance to victims of
Dedicates $363 million to the state’s rainy day fund – which will bring
the find to its highest ever balance.
1.5% pay raises for most state employees and average 3.7% pay raises for
- Implementing a tax cut
plan, which was approved by the Senate in April, that would lower the personal
income and corporate income tax rates, expand the standard deduction and
make changes to some credits.
Increases teacher pay by an average of 3.7% in year one and 9% in year
Creates a plan to for first-year teachers with certain academic
qualifications to begin at a higher salary schedule.
Expands the Advanced Placement/ International Baccalaureate and Career
and Technical Education Teacher Bonuses to include educators in charter
Creates a Drivers Safety Incentive program to reimburse families up to
$275 for driver’s education instruction costs when a student passes their
Implements a pilot program with Life Changing Experiences to educate
teenagers on dangerous behaviors and encourage healthy lifestyles.
Makes numerous changes to state laws on school performance to conform
with the Every Student Succeeds Act.
Continues to grow the reserve funds, in line with the forward funding
established in last year's budget, for the Opportunity Scholarship Program,
which awards scholarships to eligible K-12 students attending certain
Funds NC Works Career Coaches to work for local community colleges in
partnering high schools.
Transfers the Apprenticeship NC Program from the Department of Commerce
to the NC Community College System.
Establishes a Future Teachers of North Carolina program to develop
curricula and provide professional development for high school teachers to
encourage their students to enter the teaching profession.
Reestablishes NC Teaching Fellows as a loan program for students
interested in entering teaching in science, technology, engineering or
Health & Human Services
Continued support for NC MedAssist, TROSA, Community Health Care Centers
and other programs that aim to serve local communities and at risk
Reduces the NC Pre-K waitlists by appropriating $6 million from the
Temporary Assistance for Needy Families Block Grant.
Increases the annual appropriation for Smart Start, an early literacy
Appropriates $500,000 annually to the state’s smoking cessation programs
– QuitlineNC and You Quit Two Quit.
Provides a one-time appropriation of $8 million to increase impatient
behavioral health beds in rural areas.
Reduces funding for LME/ MCOS by $36.7 million.
Repeals Certificate of Need Laws by 2025 and creates limited immediate
exemptions for gastrointestinal endoscopy and ocular surgical procedures.
Expands the NC Innovations Waiver by 250 slots beginning January 2018.
Agriculture and Natural and Economic Resources
Provides additional funds for the state to purchase firefighting
equipment, including the purchase of a new airplane.
Invests $200,000 to increase the availability of fresh agricultural
products in food deserts.
- Increases funding for the Economic Development Partnership of North
Carolina for marketing and advertising tourism.
Reduces funding for Job Development Investment Grants and the One North
Justice and Public Safety
Establishes an opioid overdose response pilot project with the City of
Creates an Alcohol Law Enforcement Division of the Department of Public
Begins the state’s process to “raise the age” and ensures that the state
will try 16 and 17 year olds as juveniles in misdemeanor offenses by 2020.
- Creates a new Department of Adult Correction and Juvenile Justice,
separate from the existing Department of Public (DPS) Safety. The new
department would be responsible for all duties currently carried out by the
Divisions of Adult Correction and Juvenile Justice under DPS.
Military & Veterans Affairs
Establishes a moratorium on permitting wind energy facilities and directs
the General Assembly to contract with a private vendor to create a map that
considers where wind energy facilities may operate without interfering with
military training facilities already located in the state.
Appropriates $125,000 for the implementation of the Military and Veterans
Healing Arts Grant Program to engage current service members, veterans and
military families with the arts.
Appropriates an additional $2 million to assist communities in investment
efforts to sustain and maintain the state’s military programs.
Directs NCDOT to further increase outsourcing of preconstruction
activities to private contractors to 60%.
Extends the moratorium on adoption of new maps under the Map Act
until July 1, 2018.
Provides an additional $3 million for capital projects in both the
2017-18 and 2018-19 fiscal years.
Appropriates an additional $140,186,190 to the Strategic Transportation
- Increases funding for capital improvements at certain commercial airports
by $40 million in year one and $50 million in year two and beyond, using
revenue from rental car sales taxes.
Revenue Changes & Savings
Reduces the personal income tax rate from 5.499% to 5.35%
Increases the standard deduction to $20,000 (currently $17,500) if
married, filing jointly; $15,000 (currently $14,000) for head of household;
$10,000 (currently $8,750) for single; and $10,000 (currently $8,750) if
married, filing separately.
Expands the child deduction for people eligible for the federal child tax
credit. Deduction ranges from $0 to $2,500.
Reduces the income tax rate for C Corporations from 3% to 2.75% beginning
2018, and to 2.5% in 2019.
Adopt market-based sourcing for multistate income tax apportionment.
Creates a new general statute on market based sourcing for banks.