House Passes Budget
House lawmakers held a final vote on their state budget bill Thursday morning, officially sending the package over to the Senate for consideration. HB 259: 2023 Appropriations Act proposes to spend $29.8 billion during the 2023-24 fiscal year and $30.9 billion in the 2024-25 fiscal year. Republican lawmakers argue that their budget addresses inflation with state employee and teacher raises, childcare subsidies, and increases in the cost-of-living adjustments for state retirees, while also spending cautiously. The budget also has new funding for capital projects across the state, including historic funding levels for the popular sewer and wastewater infrastructure grant program for local governments. Additionally, while the House does not propose additional income or corporate income tax cuts, HB 259 would accelerate the income tax rate reduction to 4.5% that was included in the state budget last session. And, perhaps most consequential, the House budget proposal includes the funds necessary to implement Medicaid expansion in the state to provide roughly 600,000 North Carolinians with healthcare coverage.
Education funding is the state's largest annual expenditure, from infrastructure spending to universities to teacher salaries, so it is no surprise that much of the House proposal addresses education funding and policy changes. Although Governor Cooper requested an 18% pay raise for teachers, the House proposal gives teachers a raise of 10% over the next two years. The budget also includes raises for school bus drivers to address bus driver shortages. Other state employees would see a 7.5% raise over the next two years, and retired state employees would see a permanent 2% increase in their pensions over the next two years.
Education policy provisions that emphasize school choice, which are viewed as controversial in the eyes of some Democrats, are also included in the bill. The budget expands the Opportunity Scholarship Program, which is a voucher program designed to allow children in low- and moderate-income families to attend private schools by allocating an additional $392 million to the program over a seven-year period. The budget would also remove requirements that Opportunity Scholarship recipients submit test data to the state government. The budget proposal would remove the State Board of Education's oversight to authorize or deny charter school applications and shift that responsibility to the Charter Schools Advisory Board. Republicans have criticized the State Board of Education, which consists mostly of appointees by Democratic Governor Cooper, for denying charter schools and opposing school choice efforts.
House lawmakers passed the budget bill in a bipartisan vote of 78 to 38 with nine Democrats joining all Republicans in support of the bill. The budget now goes to the Senate, where they are expected to either draft their proposal or immediately go to a conference committee with the House to develop a compromise.