After an explanation by appropriation committee chairs, Sen. Neal Hunt, R-Wake, proposes an amendment to reduce the salaries of highly paid state employees like heads of agencies ? but not judges or elected officials ? by 5 percent. He calls it is symbolic to all who are struggling. Senate Rules Chairman Tony Rand, D-Cumberland, moves to lay the amendment on the table (in other words, he moves to kill the amendment). The vote to kill it: 28 to 20.
Senate Minority Leader Phil Berger, R-Rockingham, proposes to reinstate the percent of corporate tax that goes to the Public School Fund to help local governments build schools. It was diverted to the General Fund in the budget. Rand says it would unbalance the budget, and you can’t do it. Berger has a perfecting amendment that would fix that and readjust all totals so the budget would remain balanced. Rand and Berger discuss with Lt. Gov. Walter Dalton. Berger withdraws the amendment.
Berger debates the bill. There are discussions of spending around the state during the current year, but this budget does not cut spending because of recurring obligations in Medicaid that are not accounted for accurately.
Gov. Perdue has adjusted this year’s budget to $19.5 billion. This budget spends $20.9 billion. That’s a 7 percent increase. We have serious problems in the state. It’s fourth in the U.S. in job loss. We need to freeze spending. Berger also mentions $500 million for tax adjustments, and we don’t know what they are.
Borrowing is another problem with $300 million in 2/3 bonds. We are at the borrowing limit, maxing out the state’s line of credit. We’re taking money away from local governments after promises have been made. The revenue projection for next year will probably be off by a lot; 5 percent growth expectation is not reasonable. The process has been closed, and there has not been time to review what’s in the budget.
Sen. Harry Brown, R-Onslow, offers an amendment that would take $5 million of education money to set up five pilot programs for technical and vocational training schools. Rand asks him to withdraw the amendment and promises to help later. Brown withdraws his amendment.
Finance Chair Sen. Dan Clodfelter, D-Mecklenburg, says the revenue projections for next year are reflective of the sales tax revenue from the Medicaid shift of a few years ago that will be coming into the General Fund. He says the state budget act says that the “tax adjustment” is fine because it designates that there will be revenue. At times, the appropriations and finance bills have been separate and independent. This happened in 1983, 1989 (when the Highway Trust Fund set up), 1996, and in 2001. He says the only resposible thing is to see what we will need based on actual revenue coming in and then tax accordingly.
Sen. Eddie Goodall, R-Union, says we should have looked at school choice, building roads where cars are, and tax reform.
Berger’s amendment is revised to fix the problem with an unbalanced budget if the corporate tax goes to the Public School Fund. Rand makes a motion for it to lie on the table. That motion to kill the Berger amendment passes 29 – 20.
Rand makes a motion to call for a vote with no more debate on the budget. It passes, 31-18.
The vote on the second reading of the budget is 32-16.
