Pricey Harrison

Friday, May 06, 2005

Greetings From Raleigh 5-06-05

To summarize where we are on the budget, the Senate has passed and sent to the House its $16.95 billion budget proposal for the fiscal year that begins on July l. The House will recommend its own spending plan in upcoming weeks. Then a committee of House and Senate members will compromise on the differences and arrive at a budget that both the Senate and House can accept. This process will be followed by Governor Easley's signing of the bill before it becomes law.

Following are important points about the Senate budget:

* The Senate budget contains many substantive items such as the lottery, a change in the authority of the UNC Board of Governors to set tuition rates, control over the Horace Williams Airport by UNC-Chapel Hill, prescribing how much time teachers should spend preparing students for some standardized tests, eliminating two administrative positions responsible for environmental compliance within the N.C. Department of Transportation, a ban on video poker, etc. As I have mentioned before, regardless of your opinion on such matters, it is not good public policy to place such items in the budget, where the merits of each cannot be debated. It is anticipated that the House will consider and vote on each of these proposals separately.

* Second, the Senate budget reduced the growth rate of Medicaid, the government health insurance program for poor children, the elderly, and the disabled, beyond that sought by Governor Easley. The Senate plan would cut 65,000 aged, blind, and disabled people from Medicaid rolls, but would allow most to retain hospital and prescription drug coverage under Medicare. If this plan were adopted, 8,000 people would lose prescription drug coverage and would periodically lose hospital coverage. The House will carefully evaluate the effect this change could have if implemented.

* Third, the House likely will continue efforts to improve the state's economy and create jobs, rather than agreeing with the Senate proposal to cut taxes for the state's wealthiest individuals. One such cost-effective example is to provide a tax credit to small business owners who provide health insurance to their employees. This credit would help the business entrepreneurs and could provide access to adequate health care for thousands of workers in our state.

* North Carolina continues to be ranked as one of the best places in the nation to do business. When all state and local taxes are considered, North Carolina's overall tax burden is low. In fact, a recent report by Ernst & Young found that North Carolina's business tax burden ranks among the lowest in the nation, and the North Carolina Progress Board ranks our overall tax burden as the eleventh lowest in the country.

For those who want more details on the Senate budget proposal, I refer you to the General Assembly's home page - - where you will find the 4th Edition of the Senate Appropriations Bill (SB622) and the 4th Edition of the Appropriations Committee Report.

Please feel free to comment on any information I have provided on the budget. The House will begin a detailed review next week.


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