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House passes “historic” budget with veto-proof majority. Here are the details.

Raleigh, NC – Following multiple committees, numerous amendments and extended floor debate, the state House passed its two-year budget on Thursday with a bipartisan, veto-proof majority.


The budget includes large pay raises for teachers and state employees, additional bonuses for state workers and retirees, historic investments in disaster recovery and flood mitigation, and increased funding for education and infrastructure.

“This historic budget is transformative,” said Senior Appropriations Chair Rep. Dean Arp (R-Union). “It fully funds the vision of a good North Carolina for all citizens.”

It also cuts the personal income tax rate from 5.25% to 4.99%, increases the zero-tax bracket to $25,500 for married filers and reduces the tax burden on small businesses who utilized PPP loans to retain employees during the pandemic.

Senior Appropriations Chair Rep. Donny Lambeth (R-Forsyth) stated, “This is a spending plan we can all embrace and support to move North Carolina forward.”

The budget will now go to conference where House and Senate members will negotiate a compromise spending plan. If the final changes are approved by both chambers, the budget will be presented to Governor Roy Cooper for his signature into law.


Specific details of the budget are below:


Topline

  • Allocates $25.7 billion in 2021-22 and $26.6 billion in 2022-23 from the General Fund.

  • Invests $5.8 billion over the biennium in the State Capital and Infrastructure Fund, providing funds to build, repair, and renovate state, university, and other infrastructure needs.

  • Budgets $5.4 billion in federal State Fiscal Recovery Funds in 2021-22.

  • Brings the Savings Reserve to $2.8 billion at the end of the biennium.

Salary and Benefits

  • 5% raise for most state employees over the biennium.

  • 7% raise for community college faculty and 4% raise for non-faculty over the biennium.

  • 5.5% average salary increase for public school teachers over the biennium.

  • 7% average salary increase for correctional officers.

  • Increases minimum wage for public school and community college employees to $13/hour this fiscal year and $15/hour next fiscal year.

  • Provides 8 weeks of paid parental leave for new mothers employed by public school.

  • Restores advanced degree supplements (i.e. masters pay).

  • Removes the $50 personal day fee for teachers.

  • Provides $300 bonus for teachers from funds previously appropriated for performance bonuses.

  • Non-certified school staff like custodians and bus drivers will receive a minimum salary of $13/hour this fiscal year and $15/hour next fiscal year.

  • 2% across-the-board salary increase over the biennium for central office staff.

  • 2% salary increase over the biennium for principals, including $1,800 bonus.

  • Provides minimum bonuses of $500 for state employees and up to an additional $1,500 bonus for certain lower-paid state employees and those employees subject to greater potential risk of COVID-19 exposure.

  • $2,000 bonus for eligible direct care workers.

  • 2.0% state employee retiree supplement bonus in each of the next two years.

Education


K-12 Public Schools

  • $15.4 billion (7% increase) for 2021-22 and $15.7 billion (9% increase) for 2022-23.

  • Allocates over $1 billion in federal funding for education.

  • $10 million in school safety grants for equipment, crisis counseling, and training.

  • $9.2 million in additional funding for school internet connectivity.

  • Establishes a school safety training center.

  • Requires schools to publish lesson plans and materials online ahead of each school year.

  • Creates a new advisory committee on the standard course of study to recommend new curriculum standards to the State Board of Education for adoption.

  • Eliminates the required payroll substitute deduction for teachers who provide reason for taking personal leave during instruction days.

Community Colleges

  • $80 million for community colleges experiencing enrollment declines due to COVID-19.

  • $15 million to improve access to broadband for rural community colleges.

  • $12 million to expand apprenticeship opportunities with small businesses in high demand fields.

  • $5.3 million to fund nine positions to mitigate cyberattacks and develop a technical assistance plan.

  • $3 million to raise awareness about career and technical education programs and high-quality work-based learning experiences.

UNC System

  • $134 million in funding for enrollment growth throughout the UNC System.

  • $54.8 million for operations and maintenance of the newly completed building projects at UNC institutions.

  • $1.5 billion for repairs and renovations within the UNC System over 6 years.

  • $35 million in additional funding for the NC Promise Program.

  • $12.6 million for the University of North Carolina Need-Based Financial Aid Program.

  • $12 million in scholarship funding for students graduating from the North Carolina School of Science and Mathematics or the UNC School of the Arts High School Academic Program.

  • $100 million to North Carolina private colleges and universities to mitigate the impacts of COVID-19.

  • $4.2 million for the NC Need-Based Scholarship.

  • $35 million for the Engineering North Carolina’s Future initiative at NC State, UNC Charlotte, and NC A&T.

  • $11 million in additional funding for NC A&T’s Doctoral Programs.

  • $10.6 million for the North Carolina School of Science and Math-Morganton campus.

  • Combines three scholarships for public higher education into one new North Carolina Need-Based Scholarship Program for Public Colleges and Universities.

  • Modifies award values and income eligibility of the Opportunity Scholarship Program.

Health and Human Services

  • $15 million for rapid rehousing services, home improvements, and home repairs for families at risk for homelessness due to COVID1-9.

  • $15 million for the North Carolina Association of Free & Charitable Clinics.

  • $12.5 million to support telehealth and telepsychiatry efforts.

  • $118 million for child welfare case management and care.

  • $4 million to recruit doctors, physician assistants, dentists, nurse practitioners, and certified nurse midwives to rural areas.

  • $10 million for start-up and capital grants for childcare centers and NC Pre-K classrooms.

  • $5.2 million to fund increase in NC Pre-K rates for childcare centers by 2% each year of biennium.

  • $503 million in block grants for child care services and support.

  • $16.5 million to combat the opioid crisis.

  • $150 million to eliminate lead and asbestos in schools, child care facilities and residential housing.

  • $36 million for local health departments to expand communicable disease monitoring, detection, control, and prevention activities.

  • $102.5 million to support statewide COVID-19 vaccination efforts.

  • $89 million to support the state and local public health workforce.

  • $13 million for youth tobacco and nicotine dependence prevention activities.

  • $15 million for child advocacy centers across the state.

  • $13.6 million to increase adoption assistance and foster care rates.

  • Ensures patient visitation by clergy and other visitors during declared emergencies.

  • Enhances regional supervision of child welfare and social services.

  • Requires health benefit plans to cover services delivered through telehealth.

  • Establishes the Dignity for Women who are Incarcerated Act.

Finance

  • Cuts the personal income tax rate from 5.25% to 4.99%.

  • Reduces the corporate tax rate from 2.5% to 2.25% in 2024 and to 1.99% for all future years.

  • Simplifies and reduces the franchise tax base for corporations that have significant investments in the state.

  • Reduces the standard income tax deduction rate.

  • Reduces the tax burden on small businesses who utilized PPP loans to retain employees during the pandemic.

  • Excludes unemployment compensation from taxpayers’ gross income up to the amount specified under federal guidelines.

  • Re-enacts the mill rehabilitation tax credit effective and makes it permanent.

  • Expands and makes permanent the Historic Rehabilitation Tax Credit

  • Creates a personal income tax credit of up to $5,000 for expenses associated with being a living organ donor.

Agriculture, Natural, and Economic Resources

  • $97 million to address the impact of the COVID-19 pandemic, including funding for food banks, and meat, swine, and dairy producers.

  • $5 million to provide Forest Service with additional emergency response equipment.

  • $37.5 million for farmland preservation.

  • $177.8 million to address the impact of the COVID-19 pandemic, including funding for Rural Downtown Transformation Grants, workforce assistance, and travel, tourism, and business marketing.

  • $4 million for to the NC Biotechnology Center for job training, and grants and loans, including early-stage loans for NC agricultural technology companies.

  • $1.6 billion for water, sewer, and stormwater grants.

  • Provides six new positions and operating costs to address dam safety and landslide mapping.

  • Provides six new positions and operating costs to address emerging compounds, like PFAS.

  • Creates a Dam Safety Emergency Fund to provide the Department with resources to repair or remove dams in danger of failing.

  • Creates a new stormwater grant program to provide funding to local governments for projects that will improve or create infrastructure for controlling stormwater quantity or quality.

  • $40 million for water and sewer projects at the State Parks.

  • $56.7 million for attractions, like the Zoo and Aquariums, who suffered significant receipt losses due to the COVID-19 pandemic.

  • $1 million for historic sites maintenance.

Justice and Public Safety

  • $10 million for testing sexual assault evidence collection kits and clearing the state’s rape kit backlog.

  • $26.3 million for equipment for state law enforcement.

  • $1.3 million to combat human trafficking.

  • $8 million in grants for rural local emergency management offices.

  • $4 million for state search and rescue programs.

  • $26.9 million for pay bonuses, PPE and mobile WiFi hotspot devices for the clerks of court.

  • $6.4 million for 17 new Assistant District Attorneys (ADA) and fund the 31 ADAs created in 2017.

  • $27 million for an electronic monitoring program for pre-trial domestic violence defendants.

  • $1 million for the CJ Fellows Program, which provides forgivable loans for students pursuing law enforcement careers in rural areas.

  • Ensures speedy trials through remote testimony in some district court cases.

  • Establishes a statewide database to track officer certification suspensions and revocations and a separate database to track critical incidents involving officers.

  • $74.5 million for premium pay bonuses, VIPER equipment upgrades, the Computer Aided Dispatch system at the Highway Patrol, and to the Juvenile Justice and Community Corrections sections for reentry services.

House Disaster Relief and Flood Mitigation

  • $800 million for disaster-related programs and projects.

  • $465.6 million for immediate use, keeping over $330 million available for future needs.

  • $100 million for long-term flood mitigation and resiliency projects to better prepare North Carolina for natural disasters.

  • $20 million to create a Flood Resiliency Blueprint to guide flood mitigation projects.

  • $10 million for local government technical support.

  • $68.7 million in specific flood mitigation and disaster recovery projects in the Lumber and Neuse River Basins.

  • Creates three new staff positions to focus on mitigation and resiliency.

  • $40 million for flood mitigation projects and transportation infrastructure resiliency projects.

  • $40 million to the Coastal Storm Damage Mitigation Fund

  • $5 million to Habitat for Humanity of NC for affordable homeownership and home repair projects.

  • $51 million in grants to local governments for a variety of flood mitigation and disaster recovery projects.

General Government

  • $20 million for grants for the RETOOLNC Program, which administers grants to small, historically underutilized businesses.

  • $18 million for services to victims of domestic violence, sexual assault, and human trafficking.

  • $200 million for the Workforce Housing Loan Program.

  • $8 million to provide $10,000 grants to volunteer fire departments to help mitigate COVID-19 revenue losses.

  • $500 million to establish the GROWER Grant Program to provide economic support to businesses in the hospitality and entertainment industries that suffered substantial economic damage from the COVID-19 pandemic.

  • $15 million to provide a lump sum of $25,000 to $50,000 upon initial cancer diagnosis of an eligible firefighter and annually provide $12,000 for out-of-pocket medical expenses.

Military and Veterans Affairs

  • Eliminates tax on military pension income for service members who served 20+ years or who were medically retired.

  • $2 million for The Independence Fund, Inc. to expand a justice intervention pilot for veterans across the state.

  • $1 million to support activities focused on maintaining our state’s military presence and defense industry.

  • $30 million to build a new veterans skilled nursing facility in Wake County.

  • $2.15 million to increase the number of scholarships awarded to eligible children of disabled veterans.

  • Expands veteran employment preference for state jobs to include members of the National Guard.

Transportation

  • $16.8 billion for NCDOT’s operations and maintenance activities.

  • $414 million for highway maintenance, bridges, and pavement preservation and resurfacing activities.

  • $240 million for trash collection and roadside beautification.

  • $1 million for new inmate litter crew pilot project.

  • $226 million for NCDOT construction projects and grants for road and safety improvements.

  • $73.6 million for construction and maintenance of municipal roads and bridges.

  • $16 million for capital projects at the Global TransPark, including a fuel storage facility and terminal renovation.

  • $4.2 million for the completion of two ferry vessels.

  • Directs NCDOT to streamline its budget and creates a budget office to accomplish this project.

  • Authorizes online renewal of DMV-issued credentials, including permits, licenses, and registrations.

Rural Broadband and Information Technology

  • $750 million for the GREAT Program to expand access to rural broadband.

  • $100 million for the Broadband Make Ready Accelerator.

  • $1 million for broadband mapping.

  • $90 million for stopgap solutions associated with broadband expansion.

  • $60 million over 6 years for awareness and digital literacy.

  • $20 million for cybersecurity and risk management.

Capital Infrastructure Budget

  • Invests $5.8 billion over the biennium in the State Capital and Infrastructure Fund, providing funds to build, repair, and renovate state, university, and other capital assets.

  • $288 million for the avoidance and reduction of state debt.

  • $1.5 billion for repairs and renovations within the UNC System over 6 years.

  • $200 million for community colleges.

  • $20.5 million for renovation and preservation of historic sites across the state.

  • $184.4 million in support for parks and recreation investments, such as trails.

  • $43.5 million for K-12 athletic facilities.

  • $56.8 million for dam repairs.

  • $91.6 million for airports.

  • $58.7 million for hospitals.

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