Senate Budget Passed

The North Carolina Senate passed an updated $19.7 billion budget that would spend $300 million more than originally proposed on public schools while continuing to let the temporary sales and income taxes expire on time. The Senate version restores funding for teachers assistants for grades 1-3 and includes $62 million to hire over 1,100 teachers in lower grades. However, there is a catch.  The updated plan includes a provision requiring local school districts to cut an additional $124 million at their discretion.  The increase in education spending from the original Senate proposal is covered by cuts in several areas such as state building repairs, state pension fund contribution and forgoing the quarter-percentage point personal income tax cut.  Additionally, the new budget establishes a tax exemption for the first $50,000 of net income for small businesses. Republicans estimate that 17,000 jobs will be created within the next year as a result of the small business tax break and expiration of temporary taxes.  It is now up to the Governor and she has expressed her criticism of the budget.  Probably headed for a veto.  Keep tuned.  I have hear that the House leadership feels they have the necessary votes to override a veto.

Unemployment Benefits Extended

Gov. Perdue signed Executive Order 93 on Friday (6/3) restoring federal unemployment insurance benefits for NC citizens. Perdue refused to sign proposed legislation that tied the extension of unemployment benefits to a stop-gap spending plan that would serve as back up if a state budget was not finalized by July 1.  The Senate included a provision in their budget that would restore the benefits.  The governor was able to use her authority as the state’s chief executive to extend the benefits since they are not state funded.

With budget negotiations moving quickly, legislative leaders hope to end this year’s long session as early as June 17. Two special sessions would be scheduled before the May 2012 session to address district maps and proposed constitutional amendments. The first special session would start as soon as July 11 to redraw congressional and legislative districts based on population changes in the 2010 U.S. Census. The second special session has not been scheduled but will be held to deal with the proposed amendments to the N.C. Constitution that were submitted during this legislative session

Tort Reform:

H542: Tort Reform for Businesses and Citizens has cleared the House and is now on its way to the Senate.

Workers’ Compensation Passes in House

The House passed HB709: Protect and Put NC Back to Work. One of the primary objectives of this legislation was to bring North Carolina’s indemnity costs in line with surrounding states by limiting the duration of temporary total disability (TTD) benefits. The bill is now headed to the Senate.