NC GOP unveils budget; House backs Medicaid expansion path

— North Carolina Republican legislative leaders on Tuesday unveiled state budget adjustments for the coming year, proposing to spend or set aside billions in expected extra tax collections to raise worker pay, recruit companies, build more infrastructure and combat inflation.

The legislation, which will be voted on later this week before heading to Democratic Gov. Roy Cooper’s desk, s pends $27.9 billion in the second year of a two-year budget that was already enacted last November. The changes reflect expectations that state coffers will take in $6.2 billion more than anticipated earlier in the current fiscal year and the new year, which begins Friday.

Absent from the legislative agreement are additional tax cuts beyond the income tax reductions already set in motion when the two-year budget was signed by Cooper. Republicans from both chambers had talked publicly for weeks about considering more tax breaks to citizens struggling with inflation and other economic pressures. But they ultimately decided against it.

“This is the budget that we have ... it is the right budget for North Carolina at this time,” Senate leader Phil Berger said at a Legislative Building news conference. “Some things made the cut but some things didn’t.”

Berger and House Speaker Tim Moore portrayed the plan as a bulwark against what they consider a coming recession and inflation that has ratcheted up prices for government projects and eroded buying power. The bill sets aside an additional $1 billion for a new “Stabilization and Inflation Reserve” and builds the state’s rainy-day reserve to a record $4.75 billion.

“We’re going to run a government as much like a business as possible,” Moore added. “We’re going to live within our means. We’re not going to overspend. We’re not going to overtax.”

The proposal doesn’t spend as much as the $29.3 billion that Cooper wanted to spend in his budget that he released in May, but it still places $7.7 billion in various reserves. The pay raises aren’t as high as Cooper wanted.

The legislative plan would increase next year’s 2.5% raise for rank-and-file state employees already in place to 3.5%, while average pay raises for teachers for the upcoming school year would grow from roughly 2.5% to 4.2%, with firstyear teachers seeing base salaries of $37,000.

Unlike other measures, the adjustments are contained in a bill that can’t be amended before the up-ordown floor votes later this week. Republican leaders negotiated them privately, but did speak with Cooper before their release.