North Carolina lawmakers wasted no time after the long holiday weekend with the Senate jumping right into their budget rollout and the House holding various committee meetings and floor vote sessions. Senate leadership began the week by holding a press conference Tuesday morning, giving the public a sneak peek as to what would be included in their budget proposal. Tuesday afternoon was then packed with appropriation subcommittee meetings before sending the bill to the floor for a vote Thursday afternoon and Friday morning.

Both the House and the Senate will reconvene next week for a voting session on Tuesday, June 4th.

Budget Schedule

The much-anticipated unveiling of the Senate’s state budget proposal was the focus for most at the General Assembly this week. The Senate’s version of the budget spends the same dollar amount, in total, as the House’s proposal that was passed earlier this month. While both versions of the budget include a total of $23.9 billion for FY 2019-20, the first year of the biennium, and $24.9 billion in FY 2020-21, the second year of the biennium, the two spend the funds in very different ways. After over 7 hours total in floor debate, the Senate passed their version of the state budget in a final 30 -16 vote Friday morning.

Lawmakers from both the House and Senate will now come together to create one final proposal that will be sent off to Governor Roy Cooper. However, because neither the House nor the Senate’s budget includes funding for Medicaid expansion, one of the Governor’s top priorities from the beginning of this legislative session, many expect the budget to be sent back over to the legislature with a veto from Governor Cooper’s desk. A veto will send members back through another series of appropriations meetings for members of both chambers.

Senate Budget

Budget

Committee Report

While each individual subcommittee met on Tuesday to go over each of their own sections of the budget, the full Senate Appropriations committee met Wednesday morning for a full overview of each budget section, its provisions, and to offer any amendments before moving the bill forward through committee. Senate Appropriations chairs also waited until Wednesday’s meeting before going over their proposed salary and benefits package. The Senate’s version of the budget does not increase the average teacher salary at the same rate the House budget does, however, it does include an increase in pay for all state employees by 2.5% across the board. The Senate also included several tax provisions that mirror what was passed in the House, including a decrease in franchise taxes, providing tax and regulatory relief to out of state employers and employees who come to North Carolina to help with disaster related work, an increase in the standard deduction, and several other provisions.

Some of the highlights from the Senate’s budget proposal include:

Education

Committee Report

Special Provisions

  • Requires high school students to take an Economic & Personal Finance course in order to graduate. The course will be focused on teaching students how to choose and manage a credit card, how to plan and pay for a postsecondary education, among other financial literacy topics.
  • Provides funding for the Department of Public Instruction to allocate resources for Cooperative Innovative High Schools through their third year of operation.
  • Establishes the North Carolina Classroom Supply Program which will give $300 directly to eligible teachers to spend on classroom supplies. An additional $15 million will be allocated across LEAs in order to give them the ability to purchase textbooks and classroom supplies in bulk.
  • Allocates funds to allow for at least one school psychologist per LEA. The provision will give the LEAs the ability to contract out these services, giving schools the flexibility to hire social workers, counselors, and so on, as well.

Transportation

Committee Report

Special Provisions

  • Creates a Transportation Emergency Reserve in order to provide relief and assistance to areas throughout the state impacted by emergency situations, such as hurricanes. In order to use the funds in the reserve, legislative action is required.
  • Establishes additional registration and annual fees for electric and plug-in hybrid vehicles. The registration fee for electric vehicles will be increase to $230, while plug-in hybrid vehicles will see an increase to $115.

Health and Human Services

Committee Report

Special Provisions

  • Provides $500,000 in nonrecurring funds in FY 2019-20 to create and implement a telehealth pilot program. The program will work with providers in three Southeastern North Carolina counties; Columbus, Balden, and Robeson County. The pilot program will be funded through December 31, 2020.
  • Increases Medicaid copays to $4.00, directing the additional money received to go towards increasing reimbursements to providers
  • Provides funding to aid in the state’s Medicaid transformation projects, specifically funding any run-out costs occurred in the process with over $1.49 million in the first year of the biennium and about $10.9 million in the second.
  • Includes provisions to treat Prepaid Health Plans in the same way HMOs and self-insurers are for tax purposes. Prepaid Health Plans will be measured by their gross capitation payments and the rate at which they deliver Medicaid services.

Agriculture/Environment/Natural Resources

Committee Report

Special Provisions

  • Distributes the current cash balance of $67 million from the Film Grant Fund throughout different areas of the budget proposal. The fund will still be allocated $31 million in both years of the biennium.
  • Extends the sunset of the Dry Cleaning and Solvency Tax for 10 years, until 2030.

House Session

While the House may not have been the center of attention this week, lawmakers took action on several bills in committee. Speaker of the House Rep. Tim Moore (R-Cleveland) announced in session Wednesday that a vote on North Carolina’s controversial abortion bill will take place next week. Speaker Moore plans to hold a vote on the override of the Governor’s veto of SB 359: Born-Alive Abortion Survivors Protection Act during session next Wednesday, June 5th. The Senate already held a vote to override Governor Roy Cooper’s veto of the bill, a 30 -20 vote, with only one democrat voting green on the override. Since then, the bill has sat on the House calendar for about a month, yet to be up for a vote on the floor.

Farm Act

A packed committee meeting and a full overflow room were waiting for Senate lawmakers as the committee met to discuss SB 315: North Carolina Farm Act 2019. The bill would establish the North Carolina Hemp Commission and give them the authority to administer the state’s hemp program. After 2021, the Department of Agriculture and Consumer Services would take over the program. In order to grow or handle hemp product, the farmer or individual would have to receive a license from the Hemp Commission. The bill would also add hunting, fishing, and shooting sports to the list of activities included in agritourism. The Soil and Water Conservation Commission, which falls under the Department of Agriculture, would no longer have to make documents of the Agriculture Cost Share Program for Nonpoint Source Pollution Control public records. This could go into effective in October of this year.

The bill was up for discussion only, bringing many farmers, their neighbors, industry representatives, and law enforcement agencies to Raleigh to share their support, as well as their concerns, on the bill. Both members of the committee, such as Sen. Mike Woodard (D-Woodard) and Sen. Harper Peterson (D-New Hanover), and members of the public generally share the same concerns: documents should remain public record, there is no definition of what constitutes sport shooting, and a lack of oversight will only create more issues for North Carolinians. This near two-hour meeting follows a previous meeting last week, where the bill was also up for discussion only. The committee will hold a final meeting on Wednesday next week to hear further comments from the public and take a vote on the bill.