NC Republicans considering state employee and teacher raises, tax cuts this session

·4 min read
Dawn Baumgartner Vaughan/dvaughan@newsobserver.com

The first signs of the Republican-majority General Assembly and Democratic Gov. Roy Cooper agreeing on something this year sprang forth on Wednesday: Raises for state employees and teachers.

What isn’t clear yet: how much they might be.

House Speaker Tim Moore told reporters on Wednesday, the first day of the legislative session, that House Republicans want to look at “some increases” for state employees and teachers.

While the state budget is passed every two years, smaller budget bills in between can adjust spending. Republicans are looking at both money for employees and some sort of possible tax relief, Moore said.

The 2021 budget that Cooper signed into law in November already included 2.5% raises last year and again this year for state employees. And teachers also received an average 5% raise over the two years. The budget also included individual and corporate income tax reductions in phases. So any new legislation would be on top of that.

Budget surplus

The state will have $6.2 billion more in projected revenue this and next year, according to the bipartisan revenue forecast.

Moore called it an “incredible budget surplus.”

“Our priorities are, do no harm, keep moving forward, investing our funds in the right resources to help our people and see if we can even look at further tax relief,” he said.

Moore said specifics on what salaries and tax cuts would look like have to be balanced with the national economic trends of inflation and a potential recession, calling them “real danger signs.”

“All those things have to get thrown in the mix, so we don’t want to go spending so much money that if we were to run into an economic downturn that we would be in a jam. So we have to balance that, balance doing some increases when it comes to salary but also making sure that folks get to keep more of the money they earn,” he said.

The governor pitched his ideal budget last week. Cooper’s proposal includes additional 2.5% raises for state employees and adjusting the salary schedule for teachers so they receive at least a 7.5% increase between this past year and the upcoming fiscal year.

Moore said Republicans are still “crunching the numbers” on any amount of raises. For possible tax cuts or a rebate, he said, “we’re really looking at that.”

Moore added that he didn’t want any tax rebate to “look like a gimmick.”

He said Republicans want tax policy “that actually gives people back their money that’s not needed by the government. At the same time, something that actually pays dividends down the road — it’ll encourage either more folks to locate here, more businesses to open or operate here.”

Cooper’s request of the legislature did not include any more tax cuts.

Could be out of public eye

The state budget battle has frequently been a hard slog between the Democratic governor and Republican-led legislature. North Carolina went three years without a full state budget until negotiations finally resulted in a compromise this past fall. Even that was still months late into the fiscal year. Negotiations included moderate Democrats who had voted for earlier versions of the budget. This time, it is still to be determined which Democrats are involved.

During a brief opening House session, Moore told lawmakers that the budget process this year might be “reverse-engineered” and be a conference report bill pre-negotiated with the Senate instead of coming up through committees. Conference reports cannot be amended, and Republicans used one to pass their budget in 2018, drawing criticism over transparency.

He said after the very long 2021 legislative session that dragged out over the budget, this time they want to “try a more efficient process.”

That process also might mean it is out of the public eye until shortly before a vote.

Bath Building future?

In even-numbered years, lawmakers hold a “short session.” Moore expects the short session to last five to six weeks.

One item that Moore noticed in Cooper’s budget proposal: bringing down the Bath Building, which is a half-empty government building on Lane Street.

“They’re past their life span,” Moore said about Raleigh’s mid-20th century state government complex buildings.

The area needs to be more friendly for visitors, he said. Moore mentioned redevelopment at North Hills that included mixed-use buildings as a potential model for redeveloping the area, which is downtown.

For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at https://campsite.bio/underthedome or wherever you get your podcasts.