The North Carolina General Assembly in Raleigh. File photo by Angie Newsome/Carolina Public Press

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Details to be announced, debated later this week

State budget negotiators worked through the weekend following Saturday’s announcement of a breakthrough that could bring the 2014 short legislative session to an end.

Shortly after 6 p.m., House Speaker Thom Tillis and Senate President Pro Tem Phil Berger announced via their Twitter feeds that an agreement had been reached on two of the stickiest items in the negotiations — Medicaid spending and a teacher pay raise.

The key word in the announcements was that a “framework” was reached, which implies that while both sides are in alignment on the overall numbers, the final details of the $21 billion budget deal are still in flux.

Under an outline of the plan, as reported by several news outlets, teachers would see a 7 percent pay raise and Medicaid spending would be cut by about $135 million. The plan appears to retain most of the teaching assistants positions cut under an earlier Senate proposal, but the exact nature of the cut to Medicaid remains unclear.

Rep. Chuck McGrady, R-Hendersonville

Rep. Chuck McGrady, R-Henderson, who is leading House negotiations on the education budget, held a lengthy a Sunday work session on that portion of the plan.

In addition to education, there are scores of differing details in previous House and Senate versions that will need to be settled.

For Western North Carolina, that includes how and when a new crime lab slated to be built in Edneyville will be funded.

And while the lab is the biggest stand-alone item, differences remain on operating funds for state parks and historic sites, grant money available through the Clean Water Management Trust Fund, transportation projects and others.

Legislative leaders said they expect to announce further details early this week, and the House Finance Committee has scheduled a meeting for 8 a.m. Wednesday, although the budget bill is not yet on the official agenda.

Whether this new development on the status of the state’s budget means the legislature is hurtling toward an end-of-the-week adjournment is at best a wild guess. Once settled, it could take three or more days for the budget to work through the legislative process.

Coal ash negotiators closing in on agreement

The end-of-session wind up is also expected to include a number of bills affecting environmental protections, changes to state regulations as well as local sales tax and technical corrections.

Topping that to-do list is legislation addressing coal ash cleanup.

McGrady said Friday that negotiators are closing in on an agreement and that House and Senate staff are working on final language.

“We’re crossing t’s and dotting i’s,” McGrady said. “I’m hoping we can report something out soon.”

Once the coal ash conference committee issues its report, the bill could move quickly to floor votes in both chambers.

Also yet to be worked out is the final version of changes to state environmental regulations. A House version of the bill, which does not include a controversial Senate proposal to eliminate air quality monitors, has yet to be taken up by a Senate committee.

Sales taxes scheduled for more debate

While there’s hope in Raleigh that a budget proposal will be the centerpiece when the House Finance Committee convenes on Wednesday morning, the committee already has one contentious bill on the agenda.

House Bill 1224, a combination of provisions covering economic development and local sales taxes, would allow counties to hold referendums to increase sales taxes to fund transportation and education needs.

The bill sparked a heated debate on the Senate floor last week when legislators from Durham, Wake and Mecklenburg counties objected to a cap on local option sales taxes that, they say, will handcuff urban areas when it comes to funding transportation and education. That sparked a backlash from Senate leaders and a subsequent urban-rural debate over the division of transportation funding. A move to split off the local tax provisions failed on a close vote.

A separate provision of the bill that shares widespread support would expand state job and capital improvement grants to assist conversion of coal-fired boilers to natural gas at Evergreen Packaging’s Canton plant.

New numbers

One traditional pitfall of an extended budget debate is the prospect that additional revenue reports will change the assumptions underlying the spending plan.

That’s exactly what happened last week when an updated analysis of the impact of changes in the tax code showed an additional $205 million drop in revenue for this fiscal year and hundreds of millions more going forward.

According to a July 24 memo from the General Assembly’s Fiscal Research Division detailing projections from 2014 to 2018, the cuts will reduce state revenues by an additional $880 million over estimates used last year when the law was passed.

While it is likely the new numbers will sharpen the debate over the budget, they are unlikely to cause House and Senate leaders to alter projections used for the final budget plan.

Kirk Ross

Based in the Triangle, Kirk Ross is the capital bureau chief for Carolina Public Press. Contact him at kross@carolinapublicpress.org.

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