There’s a lot to like in the Senate budget.

I highlighted a few of my favorite things in the House budget two weeks ago. The Senate has put their budget together now, and there are things to like in it as well. Here are a few of my favorites….


As expected and as promised, the Senate keeps spending below the growth of inflation and population at 2.3% increase in spending over last year. Even without a mandatory, Taxpayer Protection Act in NC, these leaders know fiscal responsibility starts with limited government. I like that.


For teachers: Net appropriation for salaries in the Senate budget is $11.4 Billion, an increase of $394 M for 2016-17. Of the three budget proposals, teachers get the most generous raise from the Senate. The Governor suggested an average 5% increase, the House proposed a 4.1% average increase and the Senate wants a 6.3% average increase, raising the average salary to $55,000.

For state employees: The Senate includes $180 Million for state employees raises and bonuses (in addition to regular scheduled step increases). But rather than across the board raises for all, each state agency will get a block grant to distribute to their employees based on job performance and merit. Those who are doing a good job will be rewarded and those who are not, have an incentive to improve. I like that.


The Senate budget reduces the Job Development Investment Grant by $10M, (from $71.7M to $61.7). They also reduce the One North Carolina Fund by $417,883 (from $9M to $8.6M). Everyone knows and research confirms that targeted incentives just don’t work. Lower taxes, fewer burdensome regulations, strong infrastructure and a skilled workforce are a better economic development tool. Reductions in subsidies and corporate welfare are a move in the right direction. I like that.


A recession and years of irresponsible spending drained the state’s savings accounts and only in the last few years have efforts been made to replenish those funds. The Senate budget adds another $583 M to the rainy day fund, boosting the state’s savings to $1.7 Billion, which brings savings to 8% of total budget, the statutory requirement, for the first time. I like that.

Settling up.

Along with depleted savings and high taxes, past administrations left today’s General Assembly with debt. Current state debt is $8.8 Billion, with an annual debt service of $894M. We just finished paying off $2.6B owed to the federal government for unemployment insurance loan. But there’s even more that has been uncovered. In 1996 NC signed a thirty-year note and entered into an agreement/partnership with the federal government for a $544 million project to deepen and dredge the Wilmington Harbor. There were no payments due until the project was complete, but after that interest would accrue at 3%. The project will be completed this year. When the Senate discovered this debt a few weeks ago, they decided to pay off the $37M principal in this budget and avoid paying over $40M in interest. I like that.


It was recently discovered that in the very last days of the Perdue administration, broadcasters were given a very sweet private tax deal by the Department of Revenue. By broadcasters, we’re talking about The Walt Disney Co., Paramount Pictures, NBCUniversal, Paramount Pictures, Sony Pictures, Warner Bros. Entertainment and CBS, represented by the Motion Picture Association. Under their sweet deal, broadcasters would owe less than $3M in taxes for 2018. But calculated correctly, based on a viewing audience method, used by 18 other states they will owe over $36 Million. The Senate budget stops the sweet deal, changes the calculation and makes sure broadcasters pay their fair share. I like that.

And more.

I like the expansion and ten-year commitment to opportunity scholarships. I like the certainty of tuition for a four year period so students know going in what a degree will cost. I like that local schools report to the State Board what tests they are giving, when they’ve giving them and who’s paying for it. I like that increasing the standard deduction (or zero tax bracket) allows people to keep more of their money. I like the performance pay pilot program for third grade reading teachers.

There’s a lot to like in both the House and Senate budgets – limited government, fiscal responsibility, respect for taxpayers, well placed priorities. This should bode well when the conference committee convenes to compromise and combine the two  for a final budget for 2016-17.