The House budget made it to the floor of the House yesterday following an Appropriations Committee meeting that went all day long. Early in the morning, the budget went to the Finance Committee, which signed off on one fee change and approved two tax reform provisions. Those provisions increased the Standard Deduction from $15,500 to $17,500 over four years and repealed the tax on mill machinery and expanded eligibility for the mill machinery tax exemption. In FY 2016-17, those tax changes are expected to cost the state $92 million. The rise in the Standard Deduction will mean that some number of people will not have to pay income taxes.
Beginning shortly after the Finance Committee meeting, the Appropriations Committee meeting was the main show. Well over half of the House are members of the Appropriations Committee and when staff and lobbyists attend, it is standing room only. The meeting began slowly with the various subject matter committees reporting on their parts of the budget. The Senior Appropriations Chair, Rep. Nelson Dollar (R-Wake), also outlined the compensation part of the budget. Meanwhile, everyone was given a few hours to get amendments drafted to the budget.
There are a lot of myths about the budget. For example, most Members seem to think the Big Chairs have a huge amount of money that hasn’t been otherwise provided to the subject matter committees. I’ve found that not to be true. The Big Chairs keep some amount of money in reserve to address compensation issues and other big issues, but in the end they end up making cuts just like the subject-matter committees since there is never enough money to meet departments’ or legislators’ requests.
Another myth is that the Big Chairs can move money around after the subject-matter committees have voted out their parts of the budget. This is not true. The House’s Rules preclude that. Prior to the approval of the subject-matter budgets, the Big Chairs can give those committees more money, but after those budgets have been approved by the individual committees, they cannot.
Why is that? Answer: To keep the Big Chairs from changing the priorities that have already been voted on. If the Big Chairs could move money from Education to Justice & Public Safety, for example, they could effectively change the priorities of both of those committees. That isn’t allowed.
Now that doesn’t mean the Big Chairs don’t have any ability to get money into the subject matter committee’s budgets late in the cycle. The way that is done is the same way that the compensation decisions get added to each subject matter committee’s budget. A reserve can be established, and the money moved from the reserve by amendment when the full Appropriations Committee meets.
Thus, one of the first amendments to the budget when it came to full Appropriations Committee was an amendment that took the money for all of the compensation changes from a reserve and put those monies in each subject matter budget. For example, teachers, principals, bus drivers, and others are paid out of the Education portion of the budget. One of the first amendments took monies from the reserve and put those monies in the Education portion of the budget to pay teachers, principals, bus drivers, and others.
Following the compensation amendment, a series of technical amendments followed — many to correct mistakes that had occurred in the drafting process, but were caught before the budget got to the committee. By the afternoon, the committee was debating both big and small changes to the budget. For example, I offered a few amendments, one of which allows the Agriculture Department to apply for Parks & Recreation Trust Fund grants for DuPont State Recreational Forest. State parks are already allowed to seek such grant funding, but the state has only one recreational state forest. Obviously, my intent was to open up one more funding source to the Forest Service. Another amendment I offered was completely technical and related to switching some job slots that were being eliminated in the budget. We’d made a budget cut, but the job slot was filled before the budget passed.
As Appropriations Committee meetings go, this year’s meeting was the shortest mark-up session in my six years on the committee. We got done around 5:30 in the afternoon, having taken up around 50 amendments. The budget received a favorable recommendation with almost all Members — Republicans and Democrats — voting in favor.
Before coming to the floor yesterday, the budget “took a dip” in the House Pensions and Retirement Committee. As with Finance, this was simply to get the Pensions and Retirement Committee to sign off on the pension and retirement provisions in the budget. From there, the bill came to the floor.
Beginning shortly after lunch, the full House debated the budget. As in the Appropriations Committee, the first part of the session was simply an explanation of the budget. While most House Members are members of the Appropriations Committee, about 55 Members are not. Therefore, an hour is spent going through the budget explaining its provisions.
Thereafter, members started debating the bill and offering amendments. There were 22 amendments offered. Two of those amendments failed; one amendment was ruled out of order; one amendment was tabled; and the remaining amendments passed. This was a strange year because there wasn’t an extended debate over things like school vouchers, education funding, or Medicaid reimbursements that we’d seen in recent years. Most of the amendments were relatively minor.
My guess is that the reason why there were limited amendments in both the full committee and on the floor was that most legislators were pretty happy with the budget. With the budget getting an overwhelming bipartisan vote of 103 to 12, most legislators were clearly satisfied. With tax cuts benefitting low-income earners and spending targeted primarily towards pay raises for teachers and state employees, most legislators felt their priorities had been met. The twelve votes against the budget came from Democratic legislators who all represented metropolitan areas or Chapel Hill and would generally be viewed as the most politically liberal House members.
Today, the House again voted 103 to 12 on Third Reading to pass the budget, after taking up a few more amendments. The Senate will begin work on its budget next week, and could pass its budget before the end of the month.
[It should be noted that in the House budget, all state employees (including teachers) got pay raises and/or bonuses except one group: legislators. Yes, the only group of people who didn’t get any additional compensation were state legislators who will continue to be paid about $13,700. It seems that legislators are afraid to raise their own compensation, and probably some constituents think they are paid too much. Legislators do receive reimbursement for travel, albeit less than half of the federal rate, and we also get a per diem to cover room and board. Legislators last got a compensation increase in 1993.]