RALEIGH — The North Carolina Senate gave initial approval Wednesday to a state budget proposal after a fierce partisan debate in which Democrats accused the plan’s Republican authors of choosing tax reductions over restoring cuts to education, health and rural development.
The two-year plan, approved on a 33-17 party-line vote following more than three hours of debate, has been labeled by GOP budget-writers as a fiscally responsible document that locates building repairs and renovations after years of neglect during the Great Recession, and collects more rainy-day reserves.
The measure also would spend $1.2 billion in additional funds in Medicaid through mid-2015 to keep up with growth in the government health insurance programs for 1.5 million mostly poor state residents. Medicaid shortfalls have been common under both Democratic and Republican leadership at the legislature.
“We have emphasized getting our balance sheet in order after four difficult years,” said Sen. Pete Brunstetter, R-Forsyth, co-chairman of the Senate Appropriations Committee.
GOP senators defeated or detoured several Democratic amendments, some of which sought to convert $770 million set aside in the budget over two years for a future tax overhaul package to spending on public schools, college campuses and economic nonprofits. A final Senate vote was expected today. The Republican-led House will present its own plan soon.
The General Assembly wants to get a final budget to GOP Gov. Pat McCrory before the new fiscal year begins July 1.
The Republican proposal eliminates $142 million that would have otherwise gone to local school districts next year to hire 4,500 teacher assistants in second- and third-grade classrooms. One Democratic amendment would have restored the teacher assistant funding and another $61 million for teachers, but the proposal failed.
“You want to keep blaming everything in the budget on Medicaid,” Senate Minority Leader Martin Nesbitt, D-Buncombe, told Republicans. Instead, he said, GOP leaders have chosen to earmark money for tax cuts that appear to benefit more upper-income earners to the detriment of low- and middle-income families.
“At the same time, we’re cutting these programs that are absolutely essential to the people of North Carolina,” Nesbitt said later.
Republican leaders were incredulous about the tax accusations since the budget doesn’t include any details about the tax plan. They also took offense at Democratic talk about the Republicans’ misguided priorities.
“It reminds me of Disneyland,” Sen. Bob Rucho, R-Mecklenburg, told Sen. Josh Stein, D-Wake. “None of it’s true and none of it’s real.”
Senate GOP leaders rolled out a tax proposal two weeks ago with great fanfare and a video from chamber leader Phil Berger, R-Rockingham. Republicans haven’t released actual legislation, which now is getting retooled. A website that contains a tax calculator for people to calculate their changing tax bill under the original plan shows many wage earners paying more taxes.
The budget proposal would provide no pay raise for state employees and public school teachers and cuts tens of millions of dollars that would have gone to several outside economic development groups, including $16.7 million to the private nonprofit North Carolina Economic Development Center.
A lot of that money would now go toward a new state Division of Rural Economic Development that Republicans say would streamline the grant process for rural infrastructure projects needed to attract business. Officials at the N.C. Rural Center have made those kinds of grants for more than 25 years. Republicans want to move from a public-private partnership to expanding state government with more agencies, Democrats said.
“The GOP is not creating jobs,” said Sen. Malcolm Graham, D-Mecklenburg. “It’s creating chaos.”
Sen. Harry Brown, R-Onslow, said it was time to do something different for the rural economy. He ticked off the list of several eastern and western counties where unemployment rates remain in double digits.
“We’ve all really affected unemployment in those counties, haven’t we?” Brown said..
The budget also would close six prisons and scale back a seventh, leading to the loss of more than 800 state positions.
The bill attempts to save $2.9 million by eliminating an indigent legal services contract for state prisoners, installing computer terminals in prisons for convicts to perform their own legal research instead. Another provision also eliminates the voluntary public financing program for appellate court races that’s been used by a majority of Court of Appeals and Supreme Court candidates.
Republicans derailed an amendment that would have blocked the proposed shift of the State Bureau of Investigation from under Democratic Attorney General Roy Cooper’s oversight to the McCrory administration.
Advocates for people with disabilities are worried because the Senate’s budget doesn’t address what’s to become this summer of as many as 2,000 people living in adult group homes and in danger of losing their Medicaid coverage for personal care services. The General Assembly located about $40 million to supplement Medicaid payments through June 30.
“We expect many people under the new standards for personal care services will lose their services,” said Corye Dunn with Disability Rights North Carolina adding: “There is no safety net.”
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