Highlights Of The Spending Plan
The budget provides $9.48 billion for education, which is a 2.73% or $250 million increase over last year's education budget. The budget funds education at our state's K-12 schools, community colleges and universities, including additional funding to cover the more than 35,000 new students who will show up at our schools in a few weeks for the new school year. Legislators dedicated close to $80 million to address the on-going Leandro school funding lawsuit, which will provide additional funding to low wealth schools districts, disadvantaged students, high school reforms, school-based family support teams, and teacher recruitment. The budget includes $100 million for ABC bonuses for teachers, in addition to a pay raise of approximately 2.24%, and fully funds teacher assistant positions. More than $3.2 million is provided to expand Governor Mike Easley's "Learn and Earn" program, which allows students the opportunity to graduate with a high school diploma and a college degree after just five years of study. And, if the Senate passes the House lottery bill, funding from the proceeds would be invested in school construction, early childhood education, and college scholarships.
* HEALTH CARE
The budget provides more than $4 billion in funding for health care for children, folks who are blind, disabled or elderly, and restores many of the previously proposed cuts in the original Senate budget. Legislators provided funding to ensure 65,000 aged, blind and disabled North Carolinians and 30,000 children will continue to be covered by Medicaid. Children ages 0-5 currently covered by Health Choice will be moved to Medicaid, which will bring the total projected enrollment to approximately 200,000 children over the next three years. The North Carolina Senior Care prescription drug program, which currently covers 120,000 seniors, will receive $10 million. Approximately 3,200 additional children will be enrolled in the state's More at Four pre-kindergarten program. The budget also includes $10 million for the Mental Health Trust Fund and slightly more than $981,000 to hire new inspectors to ensure compliance with the new requirement that all group homes across the state must be inspected annually.
* TEACHERS & STATE EMPLOYEES SALARIES AND BENEFITS
Public school teachers will receive an average 2.24% salary increase. The budget also sets aside additional funding that could be used by the Governor, after consultation with the Legislature, to raise teacher salaries closer to the national average. Community college faculty and professional staff would receive an additional 2% pay raise. State employees will receive a pay raise of 2% or $850, whichever is greater, and an additional week of paid vacation. Legislators also raised the minimum wage requirement for all state employees to at least $20,112.
* ECONOMIC DEVELOPMENT INITIATIVES
The budget makes numerous investments in job creation efforts and provides much-needed funding for programs that help attract new jobs to North Carolina, including: 1) $4.5 million in additional funds for the Job Development Investment Grant (JDIG) program, which since 2003 has helped create more than 10,000 new jobs and $1.9 billion in investment; 2) $6 million for the One North Carolina Fund, which since 2001 has helped create more than 17,000 new jobs and $2 billion in investment; and 3) $20 million for the North Carolina Rural Center, which has helped create thousands of new jobs in rural communities and update water systems.
The budget also includes $9 million for the Wilmington and Morehead City ports, $1 million in new funds for community college Small Business Centers, and $2.65 million for customized industry training, which will help employees and companies remain competitive in an ever-changing economy.
* JUSTICE AND PUBLIC SAFETY
The budget provides more than $1.7 billion in funding for public safety programs including efforts to reduce gang violence, meth labs and internet/computer security crimes across our state, and additional funding for our state's SBI crime lab's ability to effectively process DNA evidence and keep track of the evidence in the state's DNA database.
The House approved a separate lottery bill in April, which must pass the Senate in order to create the numbers game in North Carolina. The budget made several changes to the way future lottery proceeds would be used to fund education programs in our state, including:
1. 5% of revenues off the top would be placed in the "Education Lottery Reserve Fund," which could be tapped if lottery profits do not meet expectations in a bad year. The reserve would be capped at $50 million.
2. Of the remaining funds: 50% would go toward early childhood initiatives (More at Four pre-kindergarten program; class-size reduction, Leandro/low-wealth school districts); 40% would be used for public school construction; and the remaining 10% for scholarships for financially needy community college and university students. The school construction funds would be allocated in the following way - 65% according to ADM and 35% to counties that have property taxes that exceed the state average (see chart for county funding levels). Any "overage" in the expected annual lottery proceeds would be split evenly between scholarships and school construction.
With regard to the operations of a lottery, advertising would be extremely limited, with a cap on advertising of 1% or less of total proceeds, and ads could not target minors or specific groups, must include resources for responsible gaming, and must mention the odds of winning. According to the National Conference of State Legislatures, North Carolina would have the strictest lottery advertising restrictions in the nation.
The Lottery Commission would also be required to provide information to the public about gambling addiction and treatment. $1 million per year for such addiction education and treatment would be available.
Legislators had hoped that the economy would recover so the temporary taxes that were passed in 2001 at the height of the recession could end. However, budget writers decided this revenue is needed for the next biennium to continue the funding level for education and health care programs. The budget calls for maintaining for this biennium the current half cent sales tax, as well as the tax on the wealthiest individuals in our state who make over $120,000 per year.
The cigarette tax will increase from its current level of 5 cents per pack, which is the lowest in the nation, to 35 cents by next July. This would occur in two phases: the tax would increase by 25 cents on September 1, 2005 and by another 5 cents on July 1, 2006. This increase represents a compromise between the House and Senate budget proposals on the cigarette tax and is much less than the Governor's request for a 45-cent increase.
Candy, satellite, telephone, satellite radio, and liquor will be taxed at 7%. (Liquor is currently taxed at 6%, satellite at 5%, phone service at 6%, and candy was previously exempted.) Cable will be taxed at 7%, with a credit for local franchise tax paid (5%). The entertainment/movie tax will remain the same and not increase. The tax on HMOs will increase to 1.9% in an effort to equalize similar taxes.
The budget also includes a tax credit for film companies in an effort to increase the number of films, televisions shows and commercials shot in North Carolina.
The complete budget (Senate Bill 622, proposed Conference Committee Substitute) can be found on the N.C. General Assembly's website at: www.ncleg.net.
Guilford County Budget Items
NC A&T Matching Funds, $1,089,000
Focused Growth Campus Funds, $146,428
NC A&T Arts Center Planning Funds, $25,000
Black Child Development Institute of Greensboro, $10,000
Greensboro Lifeskills Center, $10,000
Carl Chavis YMCA of High Point, $13,000
Faith Matters, $5,000
Funds for a new Heritage Tourism Officer for the Piedmont-Triad area
United Arts Council of Greensboro, $25,000
African-American Atelier, $12,000
Guilford NAA Cultural Funds, $10,000
Triad Stage, $125,000
Greensboro Symphony Society, $50,000
ACC Hall of Champions, $2 million
Sit-in Movement - renovation funds for Museum, $500,000
Salary increases for employees of NCSU and NC A&T, $4 million
Funds to promote NC furniture industry including the International Home Furnishings Market in High Point, $750,000