LEGISLATIVE NEWSLETTER

May 22, 2013

LEGISLATURE 309 LEGISLATIVE OFFICE BLDG. 300 N. SALISBURY STREET RALEIGH, NC 27603 (919)733-5850 neal.hunt@ncleg.net 15TH SENATE DISTRICT 2600 FAIRVIEW ROAD RALEIGH, NC 27608 (919)781-3464 info@nealhunt.com

THE SENATE BUDGET The Senate is in full swing these days as we pass legislation that will continue to move our state further along the path to prosperity. This week, we unveiled the Senate version of the state budget. As a co-chairman of the Appropriations Committee, my colleagues, Senators Pete Brunstetter and Harry Brown, and I have worked diligently to craft this $20.58 billion budget that will utilize North Carolinas resources effectively and efficiently while shoring up reserves and the rainy day fund. I believe that we have drafted a balanced and fiscally responsible budget that will create a culture of customer service in state government and provide an environment conducive for our states economic growth. I doubt that you have had enough time to read the 413 page budget document, so below I have highlighted some of the key budget provisions. EDUCATION The Senate budget fully funds enrollment growth in K-12, community colleges, and the university system. At the same time, our budget continues to make some much needed reforms in our public schools to ensure our students have the knowledge and skills needed to be competitive in our global economy. The Senate budget: Spends more on education than our states previous budget and about $350 million more than we spent in 2011-2012; Implements a pay for excellence system by including $10.2 million in the second year to fund annual pay raises for the most effective teachers; Eliminates the K-12 flex cut for local school districts to make the education budget process fully transparent. Previous legislatures appropriated inflated amounts to education, but required local school districts to return a significant portion to the state. Our budget sends local school districts the exact amount they have to spend, rather than using a budgeting gimmick to appear to be spending more; Restores $20 million in recurring state funds to our community colleges; Authorizes the community college system to admit high school freshmen and sophomores in

career technical education and industrial engineering courses so these students can be trained in high-demand vocational skills; and Makes responsible budgeting changes within the UNC system and creates a funding reserve for need-based financial aid. This reserve will enable our universities to know exactly how much money is available for scholarships as opposed to the guesswork of previous years.

HEALTH AND HUMAN SERVICES Our state continues to battle the increasing cost of Medicaid and federal mandates from the Affordable Care Act. The Senate budget: Includes over $1.2 billion in additional state dollars to fund out-of-control costs associated with Medicaid. Part of this explosive growth is a result of changes in the Affordable Care Act, which adds $49 million in the first year and $114 million in the second year of the biennium to our Medicaid cost; Allows the executive branch to develop a comprehensive plan for reform over the next several months; and Creates a competitive grant process run by the Department of Health and Human Services to take the legislature out of the business of picking winners and losers for funding to community nonprofits. TRANSPORTATION We have taken measures in this budget to remove political influence from transportation project decision-making, reduce bureaucracy, and create a climate of customer service within the DOT. The Senate budget: Overhauls the North Carolina Highway Trust Fund by consolidating various funding streams to prioritize and accelerate transportation infrastructure projects at the state, regional, and local level; Provides funding for targeted maintenance needs, focusing on improving, repairing and replacing structurally deficient bridges and other critical infrastructure; and Funds the replacement of information technology systems that will provide a customer-friendly environment within the DMV. JUSTICE AND PUBLIC SAFETY The Senate budget provides funding for additional public safety personnel and investing in critical emergency response technology. The Senate budget: Restores funding to 69 trooper positions within the State Highway Patrol; Provides increased funding for needed fuel and equipment; Adds 39 magistrates and 175 probation and parole officers across the state; Funds laboratory equipment and 19 new positions for the North Carolina State Crime lab; and Fully funds the upgrade and maintenance of VIPER technology to enhance public safety and energy response communication. The Senate budget also: Fully funds the state employees retirement system; Modernizes the states outdated information technology infrastructure, which will protect our citizens personal data; and Provides additional funding for clean water initiatives and water and sewer infrastructure improvements. THE LARGEST TAX CUT IN STATE HISTORY In addition to curbing our states spending appetite, it is imperative that our state government reform the outdated and burdensome tax code. Our states current tax code was written during the Great

Depression when our economy was primarily based on manufacturing and agriculture, but today our economy relies more heavily on services. On top of that, the current tax code is riddled with loopholes and exemptions that benefit special interests, which cost the state millions in revenue. The NC Senate tax plan allows hardworking North Carolina families to keep more of their hard-earned money by lowering the personal income tax rate. This plan cuts the top personal rate from 7.75 to 4.5 percent over three years and reduces the tax rate on lower income earners from 6 to 0 percent immediately. This plan encourages job growth by providing needed tax relief to businesses and attracting new businesses to our state through cutting corporate tax rates. It reduces the corporate income tax from 6.9 to 6 percent over three years. Our tax rates are currently the highest in the Southeast and lower rates should be a boon to our economy. Reforming our tax code is a work in progress, but I feel that the NC Senates approach is a giant leap in the right direction. For more information about this plan, click here. CONCLUSION The next few weeks will be a very busy time at the General Assembly as we continue to deliberate legislation and pass the state budget in a timely manner. Im confident that the remaining weeks of this session will be productive and that what we pass will continue moving our state on a path of fiscal responsibility and prosperity. As always, feel free to contact my office with your questions, suggestions, or concerns. Sincerely,

Neal Hunt Connect with Senator Neal Hunt

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