North Carolina State Government Report

03.20.2013

Governor Pat McCrory outlined his first two-year budget proposal for state government today which tracks with three priorities he stressed in his state of the state speech: economic recovery, education, and efficiency in state government.  The $20.6 billion proposal includes money to rebrand and retool the state’s economic development strategy, information system upgrades and renovations to state buildings, and hiring an additional 1,800 teachers.  The budget proposal is balanced and also sets aside $400 million for a rainy day reserve fund. 

In addition to the highlights mentioned on the economy, education, and efficiency of state government, the Governor’s budget also addressed taxes and revenue, but does not make changes with respect to the State’s revenue sources.  The budget contains no tax increases for the 2013-15 biennium.  The most significant change in tax policy included in the Governor’s budget is a repeal of the State estate tax effective January 1, 2013, reducing State General Fund revenues by $52M in the 2013-14 fiscal year and $57M in the 2014-15 fiscal year.  A similar proposal has already been approved by the House Finance Committee.  The budget does promise separate legislation dealing with reform of the corporate and personal income taxes, but states that those changes will not have any immediate budget impact.  In addition, the bill eliminates some earmarks of current tax revenues for specific purposes.  The bill eliminates an earmark of a portion of the corporate income tax for public school construction, the earmark of the State portion of the excise tax on conveyances for the Natural Heritage Trust Fund and the Parks and Recreation Trust Fund, and the earmarks on the white goods, scrap tire, and solid waste disposal excise taxes.

Media

WRAL
McCrory rolls out first spending plan
By Mark Binker, Laura Leslie and Matthew Burns

Raleigh News & Observer
McCrory's budget: Hires 1,800 more teachers, gives state workers pay raise
By John Frank and Rob Christensen

AP
McCrory stresses reserves in 1st NC budget plan
By Gary Robertson, Associated Press

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