Quick Hits: What's In NC Lawmakers' Budget Deal?

Sep 17, 2015

North Carolina's budget deal is heading to Governor Pat McCrory's desk, and McCrory says he'll sign it. WFAE's Michael Tomsic joined Marshall Terry to go over some of the details.

Let's start with education. How much does the budget raise teacher pay?

For starting teachers, the base pay goes up $2,000 to a total of $35,000. For all other teachers, there's a one-time bonus of $750. 

There had been some debate about cutting money for teacher assistants. In the end, lawmakers kept that money but won't allow school districts any flexibility with it. Last year, Charlotte-Mecklenburg Schools used some of those funds to pay for 294 teachers. It's unclear how the district will adjust.

The budget also provides funding next school year to reduce first grade class sizes by one student.

Another big debate between lawmakers was about the redistribution of local sales taxes. How did that shake out?

Rural counties will get more money, but urban counties that were worried about this change will not lose money. Here's how:

Lawmakers agreed to expand the sales tax base to include car repairs, refrigerator installations and some other services. The expansion happens in all counties. But most, if not all, of the new revenue will be funneled to 79 primarily rural counties.

So urban counties may not get any of that new pie, but they're at least not losing any of their current pie, which would've happened in earlier Senate proposals. Mecklenburg County officials say they're OK with the compromise.  

What other tax changes are in the budget?

The personal income tax rate drops slightly to 5.5 percent.

The state has revenue targets tied to the corporate income tax rate, and the budget makes sure those targets don't expire. The state is currently on pace to drop the corporate rate to 4 percent in 2016 and 3 percent the year after. 

And what happens to the state's solar energy tax credit?

Lawmakers agreed to let it expire. It was one of the most generous solar tax credits in the country. And it's a big reason North Carolina put more solar energy online last year than any state except California.

Some in the solar industry say without the credit, they may take their business elsewhere. Duke Energy, though, says it plans to keep building solar projects.

What else stands out in the budget?

The budget restores the historic preservation tax credit. Governor Pat McCrory had lobbied hard for that, saying it encourages developers to repurpose old, abandoned buildings. 

The budget triples the amount available for North Carolina's film grant program. Now it'll be $30 million. That's still far less than what the state offered a few years ago, before lawmakers turned an incentive program into the grant program.

And it increases a variety of fees at the DMV, including the cost of getting a new driver's license and registering a vehicle.

When will this become final?

Governor McCrory says he'll sign it on Friday.