N.C. Budget Slated For Final Approval

On Thursday both the House and Senate approved identical budget bills. Both chambers will vote on the bill again this morning -- state law mandates that any legislation raising revenue must be voted on two separate days.

The legislation leaped its biggest hurdle Thursday afternoon when it was passed by the House in a 62-55 vote -- mostly along party lines. The Senate approved the budget just an hour later in a 32-15 vote, also along party lines.

Legislators had hoped to complete a budget by July 1 -- the start of the current fiscal year -- but Democrats were unable to reach a consensus on a tax increase proposal that would generate additional revenue.

With just a four-seat majority in the 120-member House chamber, Democratic leaders could not gather enough votes to pass a tax increase with staunch opposition from Republicans and a group of eight Democrats who refused to support a one-cent sales tax increase.

But on Wednesday, lawmakers finally agreed on a tax package that would generate $1 billion in additional revenue and that appeared to have enough votes to pass the divided House.

The original plan was passed by the House on Aug. 30 in a slightly smaller form, but it took lawmakers three weeks to reach a compromise that had enough votes to pass both chambers. The tax package has been folded into the budget and will not be passed independently.

The package includes a half-cent sales tax increase and several targeted tax increases. The sales tax increase will be initiated Oct. 16.

Budget allocations will total $14.53 billion for the 2001 fiscal year, a 4 percent increase from last year's budget.

The UNC system did sustain $14.5 million in cuts -- about 0.8 percent of the system's annual budget. And funding for 142 staff positions was eliminated within the system.

But the General Assembly did provide $40 million in funding for enrollment increases.

The budget also put the final stamp of approval on a 9 percent across-the-board tuition increase that lawmakers approved earlier this month.

Numerous state agencies took slight cuts to their budgets but the Department of Health and Human Services had the largest hit, with more than $70 million in budget cuts.

But as the debate on the House floor unfolded Thursday, most legislators seemed relieved that the budget process was finally reaching its conclusion.

"I've had this speech written for months," said Rep. Ruth Easterling, D-Mecklenburg, as she opened the floor debate on the bill. "After months and months of work, the day we have been waiting for has finally arrived."

Easterling, who co-chairs the House Appropriations Committee and was one of the chief budget negotiators, encouraged legislators to vote on the budget as a whole, not based on individual items.

But the chamber's Republican leaders were critical of the budget and the process that went into building it.

"For every minute we spent looking at cutting excessive spending, we spent an hour trying to get enough votes to pass the tax package," said House Minority Leader Leo Daughtry, R-Johnston.

During the House floor debate, Rep. Mickey Michaux, D-Durham, defended the action of a group of Democrats known for the last several months as the Group of Eight. The group often has been blamed for not allowing the Democrats to pass a tax package in the House.

"Our sole mission was to make sure we did not balance the budget on the backs of those who could not afford it," Michaux said. "We are not obstructionists, we came here with the intent as everyone else -- to serve the people of this state."

Several other Republican legislators spoke out against the closed nature of the budget process and the unwillingness of Democratic leaders to consider budget cuts.

Since both chambers passed their versions of the budget last June, the budgeting process has been handled primarily behind closed doors and at the discretion of legislative leaders.

"We do not have a crisis in this state, we are not broke, and we do not have to raise taxes," said Sen. Virginia Foxx, R-Alleghany during the Senate's debate.

But Democratic leaders argued they were serving the best interest of the state's people. "If I was worried about my political future I would not have walked into these chambers," said Senate President Pro Tem Marc Basnight, D-Dare.

Basnight said that, at the very least, the budget will keep the state from taking a step backward -- even in the face of current economic difficulties. "We're treading water to some extent right now, but with the state of economy everyone is doing that right now," he said. "I think we're OK with this budget, just as long as the economy doesn't slide anymore."

The State & National Editor can be reached at stntdesk@unc.edu.