**Update** House approves budget on third reading in 77-38 vote after vigorous debate on the bill. **Update**
The NC House gave preliminary approval to the $23 billion budget compromise plan on Wednesday in a 77-40 vote, while the Senate has already given its final approval, passing SB257 on third reading Wednesday in a 39-11 vote.
The House still needs to pass the bill on third reading today to send the bill to Gov. Roy Cooper for signing – or for a veto.
The Republican-penned budget deal found some Democrat support in both the House and the Senate, with four Democrat senators joining the Republicans in Senate and five Democrats voted for the budget in the House.
The House will go into session Thursday afternoon to complete the budget vote.
The compromise state budget Tuesday will increase teacher pay, grow public education spending, build up the state savings reserve and direct funds to Hurricane Matthew relief.
The budget also includes major tax shifts for private citizens as well as businesses.
Speaking during debate in the House Wednesday, House Speaker Tim Moore (R-Cleveland) said, “We’ve passed along serious tax relief in this budget. Roughly 95,000 North Carolinians who today pay income taxes won’t any more. Are they the super-rich? Of course not. They’re those earning the least. We are increasing the zero-tax bracket. That’s helping those who are working to try to get by. We’re making North Carolina a great work environment, a great place to live, with low regulations, low taxes. [Taking] all of those things together, North Carolina is a place where companies want to locate and do business.”
Moore also talked about the growth the state has made under Republican leadership since 2010.
“Look at where we are now from 2008 and 2010, when we were going down the road of Illinois, which is now looking to file bankruptcy,” he said. “We are now in a state of prosperity. The tax cuts and the economic growth have produced budget surpluses and provided a more robust economy.
“Moving vans aren’t leaving North Carolina; they’re coming to North Carolina. Every budget we’ve passed in the House this decade has been bipartisan. This is a North Carolina budget, which every member can be proud of. Today is a pivotal day. We’re taking care of state employees, our retirees, and we’re providing tax relief. I hope you will support this budget.”
In the budget the standard deduction for income tax will increase to $20,000 in 2019, down from the Senate plan to increase it to $22,000, and also coming a year later than in the Senate plan. There will be corresponding increases in the standard deduction for single, married filing separately and heads of household filers.
Looking at the income tax, the budget would decrease the income tax from 5.499 percent to 5.25 percent in 2019 as well and would decrease the corporate income tax rate from 3 percent to 2.5 percent.
The budget also includes an average 3.3 percent raise for teachers in the next fiscal year and an average 9.6 percent raise for teachers across the biennium.
The budget also includes $1,000 raises for most state employees and includes a permanent 1 percent cost of living adjustment for state pensioners, a change from the one-time increase in the House budget.
Even though the bill found some bipartisan support in both chambers, the expectation is that Cooper, a Democrat, will veto the spending plan.
While a handful of Democrats voted to approve the spending plan, the overwhelming opinion from Democrats on Jones Street is that the budget misses the mark, and seemingly in contrast to many past opinions and votes, they say the spending plan includes too much “pork” spending.
Rep. Darren Jackson (D-Wake), the House Democratic leader, said the budget had an unprecedented amount of extra, unneeded spending projects, often called pork or earmarks, providing funding for nonprofit organizations, downtown revitalization and other initiatives.
But Jackson’s complaints weren’t about the pork products but where the money was being spent, and he invoked the name of the late U.S. Sen. Jesse Helms to shame Republicans.
Cooper’s office released more than so-called 100 earmarks in the budget, totaling up to more than $70 million. But House Republicans say these projects are essential for rebuilding smaller communities.
The House Democrats found an unlikely ally in their campaign against pork spending in the Civitas Institute.
Civitas Executive Vice President Brian Balfour wrote an overview of the budget compromise in which he identified more than two-dozen pork products in the bill.
While Jackson criticized where the pet projects were located, a number of the projects are based in Wake County, Jackson’s home district.
Those projects include a $225,000 increase in funding for the state transportation museum, a $2 million increase in funding for the North Carolina Museum of Art, a $257,000 increase in funding for the North Carolina Museum of History, and a $350,000 increase in funding to the NC Symphony.
The list also includes various local county and municipal museum projects and non-profits as well.