NC Budget Update

By Wendy Kelly, Public Affairs

The conference process for the budget formally began on August 19 after the Senate voted to non concur on the House’s version of the budget and conferees were appointed. Negotiations have been underway since that time.

The House made different tax reduction assumptions in their budget resulting in more availability of funds. Before conferees can finalize their negotiations, they must first determine the final tax package (availability of funds).

This seems to be the hiccup in the progression of negotiations. Currently, the “big” chairs are having few meetings while the corner offices (Speaker and Senate President) make their determinations on availability. At the same time, the sub-chairs have been sidelined.

Typically, this availability number is determined at the beginning of the budget process. With the ARP funds, increased NC revenue, and tax cuts, the path forward is murky.

The big-ticket item which will impact the final negotiations is teacher/state employee pay raises. The House funding is more generous. In addition, the House budget funded significantly more one-time capital projects. Proponents of Medicaid expansion also remain hopeful for a seat at the table.

As this process drags on, the federal infrastructure bill may begin to factor into the negotiations as the state expects to receive another large tranche of funding. Combine this factor with the required redistricting and there’s no end in sight for the session.

The Senate is making moves to shut down committees in the next couple of weeks. In reality, what that means is all bills will just run through the Rules Committee and anything remains possible.

The current bubbling is that the budget will be complete by the end of September, but there’s no reason why this budget process won’t tip over into October.

The House budget was supported by a number of Democrats sending a signal to the Senate that their budget could withstand a veto by Governor Cooper. The governor has yet to sign a budget since he became governor and most feel he will sign this one unless the budget significantly dips to the Senate’s numbers.

Whether or not they will adjourn post-budget and return to deal with redistricting and federal infrastructure dollars or simply continue in session remains to be determined.

All of this is unprecedented. Please do not hesitate to reach out to CRMCA with any questions.