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House Budget Committee Approves Historic Spending Plan

 Raleigh, N.C. – The North Carolina House Appropriations Committee approved a 2017-2018 budget proposal on Wednesday that raises teacher pay for the fourth consecutive year, eliminates the waiting list for Pre-K students statewide, cuts taxes for low-income and middle class families and makes historic commitments to the state’s savings reserve.

“We are now a dynamic state, a state that competes in a global marketplace,” said Senior Appropriations Chairman Nelson Dollar (R-Wake) in committee on Wednesday.

“I believe that this budget, on behalf of this House, furthers that competition to put our people in the best position globally to realize their dreams and be able to seize their opportunities and continue the wonderful quality of life that we enjoy and cherish here in North Carolina.”

  • The House budget would provide teachers at all experience levels a salary increase, with the largest raises targeted to teachers with 15-20 years of experience.
  • It also creates a retention bonus of up to $5,000 for teachers with 27 years of experience or more, if they agree to teach for an additional two years.

“We are continuing to invest in good quality teachers by rewarding them for their invaluable contribution to education in North Carolina,” said House Speaker Tim Moore.  “This is the fourth consecutive year of teacher pay raises in North Carolina, but almost all state employees are getting a significant pay raise in this year’s House budget as well.”

“I’m very proud that the House continues to raise teacher pay and at the same time live within the budget, invest in core services and return savings to the taxpayers thanks to robust economic growth.”

  • The House budget provides a $1,000 raise for most state employees in 2017-2018 and an additional $1,000 raise to state employees in 2018-2019.
  • It also provides five bonus leave days for state employees and a new salary schedule to raise pay for principals and assistant principals.

“Proposing a great budget that invests wisely in government services while encouraging economic growth takes a combination of considerations; not simply whether to spend, save or cut taxes with our budget surplus,” Moore continued.  

  • The House budget fully funds K-12 enrollment growth and increases textbooks and digital materials funding by $10.4 million in 2017-18.

“This House budget ensures we are spending appropriately to fund all our needs, continuing to raise salaries for teachers and state employees, setting aside billions in savings and cutting taxes for hard-working North Carolinians too.”  

  • The House budget would also eliminate the North Carolina Pre-K waitlist by 2018-19, increasing the number of Pre-K slots to approximately 29,300 in FY 2017-18 and 31,700 in FY 2018-19.

“It’s appropriate that you invest in providing a quality infrastructure to continue to grow our economy, but the House Republicans are determined to get rid of waste, to make sure we are more efficient so we can return money to the taxpayers while saving for the future,” Moore said.  “This year’s House budget does all of that, and much more.”

  • The House budget also transfers an additional $263 million to the Savings Reserve to bring the total held in the “rainy day fund” to $1.82 billion, the largest balance in the Savings Reserve since its inception.

“This budget puts us on track to regularize our savings and ensure those funds will be spent appropriately in future years to deal with disasters both natural and economic and future contingencies unexpected by the state,” said Senior Appropriations Committee Chairman Nelson Dollar (R-Wake) in committee on Wednesday.

“The Rainy Day Fund would now be $1.82 billion, the highest this reserve has ever been in our state.  We will certainly be looking to grow that so that when we do come to the next economic downturn this state will not be faced with a prospect of cutting vital services or raising taxes when people can’t afford to pay them.”

  • The House budget proposal also provides an additional $150 million for disaster recovery, funding that supplements the $200.9 million in funds provided by S.L. 2016-124 (Disaster Recovery Act) bringing the total State funding for Disaster Recovery to $350.9 million.

“Savings is important because you don’t know what the future holds,” said Speaker Moore.  “It’s the same as your family budget or my family budget, you don’t want to just spend everything you make.” 

“You want to set aside for future needs – we know at some point there will be another natural disaster or the economy will turn and won’t be as strong as it is. The more we save in advance, the less we have to deal with downturns in the future by cutting the budget or raising taxes.”

  • The House budget cuts taxes by increasing the standard deduction by $1,000 for married filing jointly taxpayers and surviving spouses, by $800 for heads of household, and by $500 for single and married filing separately taxpayers

“House Republicans’ approach of lowering taxes, investing wisely and saving for the future has proven successful this decade by generating robust economic growth and substantial budget surpluses,” said Speaker Moore.

  • Enrollment growth in the UNC system is fully funded by the House budget.

 

  • The House budget establishes the Teaching Fellows program, a competitive forgivable loan program that will provide students interested in entering teaching in STEM or special education fields with up to $8,250 per year.

“I’m proud of my House colleagues and their efforts for submitting outstanding budget proposal this year that maintains our proven approach to lowering taxes, investing in state employees and encouraging economic growth in North Carolina,” Moore said.  

“Some always want to spend more and more money, and we know that’s not sustainable.  The one thing that is strangling our national economy is debt, but as a state, we are in great shape.”

Background:

House Supports Successful Investment Strategies in 2017-2018 Budget

“As North Carolina families and businesses know, there’s a stark difference between wasteful spending and smart investing of their hard-earned money,” said House Speaker Tim Moore.  “The Republican-led House of Representatives has produced a far better return on investment with our budget strategy this decade compared to the failed policies of last decade.” 

North Carolina teacher pay rising faster than any state since 2014

Democrat Governor Bev Perdue Cuts Teacher Pay in 2009

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–Tax Relief This Decade, Tax Hikes Last Decade–

North Carolina Republicans have cut taxes for families and businesses by over $4.5 billion this decade, and the state reported a $580 million budget surplus in the Spring of 2017.

In 2011, General Assembly leaders resisted demands from then-Governor Perdue to permanently install a $1 billion annual sales tax increase.

State taxpayers now enjoy a lower and consistent 4.75 percent sales tax rate on all their purchases under Republican leadership, in addition to significant income tax reductions.

Last decade, Democrats raised sales taxes in 2003, 2005, 2007 and 2009 by billions of dollars on North Carolinians and still ended the decade billions in debt. 

Despite being handed almost $2.5 billion in debt in 2011, Republicans in the North Carolina General Assembly repaid that obligation ahead of schedule.

Beginning in January 2014, the individual income tax fell from a top rate of 7.75 percent to a simplified, single 5.8 percent rate. Along with lowering rates, a larger standard deduction of $7,500 of income for singles and $15,000 for married filers was created.

In 2015 the North Carolina General Assembly cut personal income taxes for the second time in three years.  Starting in 2017 North Carolina’s personal income tax rate dropped from 5.75 percent to 5.499 percent and the standard deduction increased again.

North Carolina’s corporate tax rate – formerly highest in the southeast at 6.9 percent – was reduced to 6 percent in 2014, 5 percent in 2015, 4 percent in 2016 and 3 percent in 2017.

Among states that have a corporate tax, North Carolina now has the lowest in United States.

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Economic Accolades for North Carolina 2016-2017