Legislature OKs NC stop-gap state spending plan

RALEIGH, N.C. (AP) -- The General Assembly made quick work Tuesday of approving contingency plans for North Carolina government because passage of a two-year budget plan was unlikely less than a week before the fiscal year ends.

In one afternoon, the Senate and House approved a stop-gap spending measure that would keep funding government operations through July 31 as budget talks continue.

The measure, which now goes to Gov. Pat McCrory's desk for his signature, is needed because legislative leaders haven't yet negotiated a final budget through mid-2015.

House and Senate Republicans are first trying to first reach a deal on a tax overhaul that will make clear how much money they'll have to spend. While the House unanimously approved the so-called "continuing resolution," the Senate vote was 37-12, with five eastern Democrats joining Republicans in backing the measure.

The bill tells state agencies for the next four weeks to spend at a level no higher than 5 percent less than what was approved for the current fiscal year.

It also tells the state budget office to find $45 million in savings from current unspent funds to pay for an even larger Medicaid shortfall this year. Lawmakers last month gave the McCrory's administration the power to spend up to $450 million to deal with a similar shortfall and clean up a previous accounting decision made to narrow an old budget gap.

Some spending was allowed to increase, including $10.7 million to prepare for increased public school attendance at year-round schools this summer. Community college student tuition rates also are allowed to grow.

The bill also directs the budget director to begin carrying out budget reductions identical in both the House and Senate versions of the budget.

Budget writers said the expanded Medicaid shortfall may be attributed to large numbers of invoices before the state switched to a new Medicaid billing system next week.