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Sunday, November 27, 2022

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The state budget that emerged after weeks of secret negotiations is 429 pages long, but most legislators will have had less than 72 hours to read and digest the voluminous document before voting on it.

Worse, the public has had little chance to scrutinize the contents, which include some pretty dramatic changes that will affect residents’ pocketbooks.

In rolling out a document of such importance and ramming it through the legislative process without adequate notice, the leaders of the General Assembly are doing a disservice to the people of North Carolina.

Republicans used to criticize the Democratic leadership for notorious midnight surprises inserted into legislation, but only the parties have changed. Many of the practices remain the same.

The budget itself is a mixed bag, based on some of the major provisions leaders discussed. No doubt some surprises will emerge after the public has more time to read between the lines.

In some ways, this budget is superior to the Senate version, which cut teacher assistants, historic preservation tax credits and driver education, and which embraced a plan to redistribute sales tax according to a formula that would hurt urban and tourist counties such as our own New Hanover.

The compromise $21.74 billion budget — a figure agreed upon previously by House and Senate negotiators — includes $8 million for historic preservation credits in 2016-17 but nothing for the current fiscal year; keeps teacher assistants in place for now, and funds school-based driver education programs. With the driver’s ed money comes a requirement for legislative review of the state’s programs for quality and consistency.

It also restores and expands the medical expense deduction that was taken away from senior citizens in the previous budget. The new provision extends the deduction to all residents with significant out-of-pocket medical costs.

Film grants are also expanded to $30 million, an increase of $20 million over this year’s allotment but just half of what the state had spent through a tax credit last year to lure movie and TV projects — remember “Iron Man 3”, “Under the Dome” and “Homeland”? — to North Carolina.

Teachers and other state employees will get a $750 bonus instead of the 2 percent pay raise proposed in the House budget. Beginning teachers and state troopers also will see higher starting salaries.

Transportation dollars will continue to fall short of what’s needed to address all needs, but this General Assembly has finally stopped the transfer of money from the Highway Trust Fund into the general fund for government expenses. That move will add about $216 million to the fund for roads, ports and transit, not counting the increase that was already in the budget.

As for the sales tax, a new compromise calls for establishing a nearly $85 million fund to be distributed to rural counties based on a set formula. Leaders say the new formula will not hurt urban and tourism-dependent areas but will help rural counties with limited sales tax bases build new schools and other items. Money for that fund will come from an expansion of the sales tax to installation, repair and maintenance for cars, appliances and other items.

Legislative leaders tout a new round of income-tax cuts for individuals and corporations in the new budget, as well as a $500 increase in the standard deduction. But they fail to acknowledge that increases in other taxes and fees — such as the expanded sales tax and significant increases in motor vehicle and driver’s license fees — disproportionately affect low- and middle-income families.

Gov. Pat McCrory indicated over the weekend that he would veto any package that contained what he terms a tax increase — and he mentioned the expanded sales tax base in making that statement. But it remains to be seen whether he will send the budget back.

Renewable-energy tax credits, meanwhile, will be allowed to expire — a mistake, given that North Carolina has been a leader in creating jobs based on solar and other renewable sources of energy. The good news is that solar power, in particular, is taking hold on its own and may be able to survive despite the best efforts of state lawmakers to kill it by removing tax subsidies for renewables.

If all goes as legislative leaders plan, the budget will go to McCrory on Friday. Just by coincidence, the latest continuing resolution expires that day, so if the governor rejects it, lawmakers would have to pass another continuing resolution.

Or, if they are in a particularly spiteful mood, they could refuse to do so and point the finger of blame at McCrory for shutting down the government.

Never underestimate the appeal of taking the political low road.

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