Fitzsimon File

Tuesday may have marked the beginning of the state's new fiscal year, but it was just another day in the budget negotiations between House and Senate leaders.

Governor Mike Easley tried again to weigh in, but it was tough to hear his budget pleas above all the noise created by revelations that his wife Mary was part of a group of public officials that made two trips to Europe that cost the state $109,000.

Easley told reporters that legislative leaders are not responding appropriately to news that state revenues are $70 million less than original forecasts. Easley wants more money for teacher raises, opposes efforts to give tax breaks to the wealthy and the working poor, and promises to veto any budget that is unbalanced.

Not too many years ago Easley submitted a budget to lawmakers that was balanced only by revenues from a state lottery that hadn't passed and was not approved by that session of the General Assembly.

Easley does have a point about budget integrity this year though, and Tuesday he specifically questioned the proposal to repeal the state gift tax that primarily benefits the wealthy and reduces state revenues by $20 million.  A statement from his office Sunday also questioned the House proposal to increase the State Earned Income Tax Credit that helps the working poor.

But House and Senate leaders seem to have moved beyond decisions about tax policy and are now reportedly stuck on disagreements over university funding and construction projects paid for by bonds that don't require a public vote.

There's good news and bad news if that is all that remains at issue. Last week House and Senate subcommittees agreed to increase funding for children's health care to allow newly eligible children to enroll and backed off the drastic cuts to the community support program in the Division of Mental Health.

Negotiators have also decided to increase funding for teacher bonuses as part of the ABC program to $90 million, still short of the $107 million the State Board of Education says is needed, but better than the $70 million in the original House and Senate budgets.

It looks like the final budget will include $45 million for increased cost of fuel for school buses. That's not enough either, but it is much better than the Senate's absurd proposal to spend only $11 million and force local schools to make up the difference.

Republican leaders took the expected shots at Easley for the European trips and restated their position that budget writers should take the lower of the House and Senate budgets in most cases, saving money that could be redirected elsewhere.

That would mean fewer children would have health care, fewer kids would be taken off the waiting list for a child care subsidy, N.C. Central's Law School would have to wait for overdue improvements, etc.

That is not a plan for a budget, it is a soundbite and a press release. But the back room budget process makes it harder for legislative leaders to respond. Easley took the chance Tuesday to get in his own complaint about the process, referring to the "five or six people who get behind closed doors and work on the budget."

But inconsistencies abound in Raleigh this time of year. Easley appeared before the media to support legislation sponsored by Rep. Dan Blue to help homeowners facing foreclosure keep their homes, which ought to help thousands of families.

But Easley's own budget included no new funding for the North Carolina Housing Trust Fund that addresses the state's affordable housing crisis for renters and homeowners alike.

The House and Senate budgets increase funding for housing for the disabled, but invest only $2 million in the Trust Fund for affordable housing statewide. That might be a place where revenue gained from keeping the gift tax in place could go.

It is still likely that a final budget will appear this week and it's hard to imagine lawmakers not having Easley's support before they unveil it.

But don't count on it. This is an election year after all.

 Email This Post  Print This Post

This entry was posted on Tuesday, July 1st, 2008 at 2:54 pm and is filed under Fitzsimon File. You can follow any responses to this entry through the RSS 2.0 feed.