North Carolina General Assembly Week In Review - June 26, 2015

State Budget Negotiations Begin

The House voted not to concur with the Senate's budget proposal Tuesday in a unanimous vote of 112-0, setting off budget negotiations between the two chambers that could last well into the summer. In rejecting the Senate's $22.4 billion spending plan, House members were critical of major policy changes senators made in the areas of Medicaid, taxes and economic incentives, among other things. The House Finance committee met Tuesday and Thursday to gain a better understanding of the Senate budget's finance provisions by reviewing major changes the proposal would make in tax formulae affecting hospitals, non-profits, cities, counties and others. Committee members gave a largely cool reception to the plan, part of which calls for dropping the current $45 million cap on sales tax refunds for non-profits down to just $1 million over five years, in addition to redistributing sales tax revenue among North Carolina's counties.

Many hospitals and non-profits have been critical of repealing the non-profits cap, saying they rely heavily on sales tax refunds to balance their budgets and the proposed change could lead to the closure of struggling rural hospitals. House Finance chairman Jason Saine (R-Lincoln) said that the Senate wants "serious changes" which require careful study and that he felt members had "a long way to go before we get any sort of agreement." Review a full summary of the Senate's tax and economic development provisions here.

The state's fiscal year ends next week on June 30 and House Speaker Tim Moore (R-Cleveland), along with Senate President Pro Tempore Phil Berger (R-Rockingham), has already said he feels it is "unrealistic" for members to have a budget in place before then. In the absence of a budget deal, a continuing resolution (CR) would need to be passed to fund state government on a temporary basis until final agreement on a spending plan could be reached. A budget conference committee, made up of appointees from both chambers and charged with ironing out differences between the two bodies is expected to be appointed early next week, though members do plan to take a break for the July 4 holiday, meaning that budget conferees may not formally meet until the week of July 6. Yesterday, it appeared as though the House and Senate were close to agreeing on a CR, but no deal was made. This means that a vote on a CR could come next Monday at the earliest, or possibly Tuesday, the final day of the fiscal year.

Review summaries of each subsection of the Senate budget here and the House budget here.

H372, 2015 Medicaid Modernization Passes House

House Bill 372, 2015 Medicaid Modernization, passed the House on Tuesday with a final vote of...