General Assembly passes bipartisan state budget including tax cuts, teacher raises
Raleigh, N.C. – The biennium State budget, SB 105 / S.L. 2021-180, for fiscal-years 2021-2023 is now law following a strong bipartisan vote last week, 41-7 and 104-10, in the State Senate and State House, respectfully.
As a result of responsible budgeting decisions, millions of middle-class families and job-creating small businesses will keep more of their earnings under this budget. Among the many tax-cutting provisions in the Finance package includes, cutting the personal income tax rate from 5.25% to 3.99%, increasing the zero-tax bracket to $25,500 for married filers, eliminating State income tax on military pensions, phasing out the corporate tax, and reducing the tax burden on small businesses who utilized Paycheck Protection Program (PPP) loans to retain employees during the pandemic.
Under Republican legislative leadership, the State has seen billions of dollars in budget surpluses – and billions in savings reserves – through tax relief and balanced budgeting that helped spur economic growth. Under previous leadership, North Carolina faced teacher pay cuts and furloughs, as well as historic budget deficits, despite Democrats raising sales tax rates in 2003, 2005, 2007 and 2009.
“Over the past several months, the Governor and Legislative Democrats have attempted to expand failed social programs, deny tax relief for working families, impede our efforts to attract new jobs, reject meaningful improvements to public education and resume to the same wasteful spending that led to a multi-billion-dollar budget deficit when they were last in the majority. In spite of their efforts, I’m proud that the General Assembly was able to pass a budget that remained laser-focused on funding the core priorities of State government, strengthen our schools and make smart investments in our future,” Representative Keith D. Kidwell (R-District 79) said.
District / Eastern North Carolina Highlights include, but not limited to:
BEAUFORT COUNTY ECONOMIC DEVELOPMENT
Appropriates $20 million for economic development in Beaufort County. These funds, under the direction and control of the Washington-Warren Airport Advisory Board, will be used for infrastructure modernization at the Washington-Warren Airport to attract new jobs and economic growth including, but not limited to, existing industries in manufacturing, boat building and agriculture.
“The availability and access to modern infrastructure is essential to spur jobs in Eastern North Carolina. Tremendous teamwork has gone into making the Washington-Warren Airport project a reality in the State budget,” Kidwell said. “These infrastructure upgrades at the airport are vital not only to attract new jobs but also to support growth among Beaufort County’s current manufacturing, boat building and agriculture sectors.”
Earl Malpass, Washington-Warren Airport Manager, released the following statement:
“We are very excited about the Washington-Warren Airport expansion project included in the State budget. This investment will secure necessary improvements, add a boost to the area’s economy, and pave the way for private investment dollars and long-term jobs for the residents of Eastern North Carolina,” Malpass said. “We appreciate all the hard work, dedication and commitment of Representative Keith Kidwell in making this project possible.”
BEAUFORT COUNTY
Designates $5 million to the Town of Bath for a sewer system repair project. This appropriation provides the Town with the resources needed to make numerous improvements to increase the permitted capacity of the Wastewater Treatment Plant.
Provides $4.1 million to Beaufort County Community College for new construction or rehabilitation of existing facilities.
Provides a $2.5 million grant to Beaufort County Community College to establish a satellite campus in Aurora, N.C.
Provides a $121,000 grant to Washington High School for repairs and renovations of the soccer field.
Allocates a $360,212 grant to the Town of Chocowinity for a new emergency vehicle.
CRAVEN COUNTY
Designates $230,000 to the City of New Bern for a wastewater infrastructure project.
Designates $75,000 to the City of New Bern for a stormwater project.
Appropriates $5.7 million to Craven County Community College for new construction or rehabilitation of existing facilities.
Provides a $200,000 grant to the Craven County Sheriff's Office for the purchase of emergency response equipment.
Allocates $300,000 grant to the City of Havelock for the Fairview Street project to repair the culvert crossing of Joe's Branch.
Appropriates $135,000 to the Town of Dover for community center upgrades.
Appropriates $120,000 to the City of Havelock for playground equipment.
Appropriates $100,000 to the City of Havelock for signage and military family support.
Allocates $200,000 to the Town of Trent Woods for the restoration of key drainage routes.
Provides a $100,000 grant to the Town of Cove City for capital improvements.
EASTERN NORTH CAROLINA
Additional key budget highlights for Eastern North Carolina, but not limited to:
DARE COUNTY
Appropriates $35 million for the construction of affordable housing units in Dare County as directed in the budget text provision.
Provides a $425,000 direct grant to Dare County for the purchase of 8 emergency pumps.
Allocates $4.2 million for the construction of a new exhibit at the Graveyard of the Atlantic Museum in Hatteras.
Provides a $900,000 direct grant to the Outer Banks DARE Challenge for expansion of a treatment facility.
Designates a $22,000 grant to the N.C. Marine Industrial Park Authority for capital improvements at the Wanchese Marine Industrial Park.
Appropriates funds for an additional magistrate in Dare County.
Increases the grant funds designated for Outer Banks Hotline.
College of the Albemarle
Appropriates $6.3 million to College of the Albemarle for new construction or rehabilitation of existing facilities.
HYDE COUNTY
Provides $1 million grant to Hyde County for the Mattamuskeet Restoration Drainage project.
Allocates a $250,000 grant to Hyde County for capital improvements.
Increases the grant funds designated for Hyde County Hotline.
PAMLICO COUNTY
Provides a $333,333 grant to Friends of the Pamlico Library for capital purposes at the Pamlico County Library.
Provides $1.2 million to Pamlico County Community College for new construction or rehabilitation of existing facilities.
Allocates $650,000 to support the Pamlico Community College prison education program.
Allocates a $450,000 grant to Pamlico County for economic and community development and public safety.
Allocates a $115,000 grant to the Pamlico County History Museum.
East Carolina University Brody School of Medicine
Provides funding for the construction of a new Brody School of Medicine. The total amount authorized for the project is $215 million.
NCDOT Ferry Division
Provides $4.2 million for the completion of two ferry vessels.
Oyster Restoration
Allocates $2 million to the North Carolina Coastal Federation to provide grants for living shorelines, oyster reefs, and marsh restoration.
Provides an additional $1.5 million for the Jean Preston Oyster Sanctuary Network.
Global TransPark in Lenoir County
Provides $16 million for capital projects at the Global TransPark, including a fuel storage facility and terminal renovation.
Rural Broadband
Appropriates $1 billion to expand access to broadband.
Washington County EMS Facility
Provides a $3 million grant to Washington County for the construction of a new EMS facility.
Tyrrell County – 4-H Center
Provides a $600,000 grant to the Eastern 4-H Center in Tyrrell County.
Rural Tourism Recovery Pilot Program
Allocates $1.5 million in funds for a rural tourism recovery project to be included in, but not limited to: Chowan, Gates, Hertford, Martin, Perquimans, Tyrrell and Washington counties.
OVERALL
Budget appropriates 25.9 billion for FY 2021-22 and $27.0 billion for FY 2022-23.
The “Rainy Day” savings fund will be $4.25 billion at the end of the biennium.
SALARIES
A 5% pay raise for state employees and teachers over the biennium.
Implements $15 per hour minimum wage for all non-certified public school personnel and community college staff.
Provides $2,800 bonuses to most teachers using federal funds.
Provides bonuses for all state employees using federal funds: $1,500 for state employees who make less than $75,000, and $1,000 for state employees who make more than $75,000.
$1,500 bonuses for law enforcement, correctional officers and staff, and 24-hour residential or treatment facility employees receive.
$100 million for a new state-funded teacher salary supplement (1.7% increase) focused on low-wealth counties.
5% state and teacher retiree cost-of-living adjustment bonus over the biennium.
New salary-based schedule for corrections, probation, and parole officers – resulting in average 7% salary increase for correctional officers and 17% raise for probation/parole officers.
INFRASTRUCTURE & JOBS
$6 billion to the State Capital and Infrastructure Fund over the biennium to fund infrastructure projects across the state.
$1.0 billion for UNC System capital projects and $400 million for Community Colleges.
$1.7 billion for water, sewer, and stormwater improvements.
Creates a $500 million fund to provide grants to businesses impacted by COVID-19 in the hospitality and entertainment sectors.
Expands apprenticeship opportunities in high-demand fields at small businesses.
$1 billion for broadband expansion.
$46 million for infrastructure at motorsports facilities, including $9 million for Rockingham Speedway, $18 million for North Wilkesboro Speedway and $13 million for Concord for projects connected to Charlotte Motor Speedway.
Funds hundreds of local projects at museums, laboratories, National Guard facilities, universities and community colleges, local courthouses, dams, hospitals, historic sites, small airports, athletic facilities at schools, trails, and parks across the state.
$283 million to support deepening and expanding the Wilmington Harbor.
$338 million for major Economic Development Projects.
$5 million to the North Carolina Trucking Association Foundation to address the truck driver shortage in the state.
SAVINGS & TAXES
Increases zero-tax bracket — the amount of income on which people pay no income tax — to $25,500.
Brings the “Rainy Day” savings fund to $4.25 billion at the end of the biennium – the largest in state history.
Cuts the personal income tax rate from 5.25% to 3.99%.
Increases child tax deduction by $500 per child.
Allows businesses impacted by COVID-19 to deduct expenses paid by Paycheck Protection Program (PPP) loans.
Eliminates state income tax on military pensions.
Reduces and simplifies the franchise tax on businesses.
Phases out the corporate tax.
Expands and extends Historic Preservation Tax Credit.
Extends Mill Rehabilitation Tax Credit.
EDUCATION
Additional $1.5 billion (10% increase) above the base budget for K-12 education over the biennium.
$800 million from lottery fund for school capital projects.
$200 million to the Public School Capital Fund.
$80 million into a newly created school repair and renovations fund.
Adds Fayetteville State University to the N.C. Promise program, which guarantees $500 in-state tuition per semester at participating schools.
Expands funding and eligibility for Opportunity Scholarship Program.
Ends the requirement that teachers pay for a substitute teacher to cover their classes.
Improves broadband access for 25 rural community colleges.
Provides funding for School Safety Grants.
Includes additional funds for school internet connectivity.
HEALTH CARE
Fully funds a new Brody School of Medicine at East Carolina University.
Extends postpartum Medicaid services for new mothers to a full year.
Allows a parent to retain Medicaid eligibility while their child is temporarily in foster care.
$15 million for child advocacy centers.
Creates a 2022 joint legislative study committee on health care access and Medicaid expansion.
Increase Direct Support Personnel wages to $15 per hour – workers who serve elderly, most medically fragile and the intellectual and developmentally disabled.
$150 million for lead and asbestos remediation in schools and childcare facilities.
Provides additional 1,000 Innovations Waiver slots to serve the intellectually and developmentally disabled.
Over $16 million to combat the opioid crisis.
$5 million for rural hospitals.
$4 million to recruit doctors, physician assistants, dentists, nurse practitioners, and certified nurse midwives to rural areas.
DISASTER RELIEF
Transfers $800 million to the State Emergency Response and Disaster Relief Reserve.
Appropriates $412 million for disaster recovery from previous events and mitigation efforts to prepare the state for future flooding and other natural disasters.
$124 million for Tropical Storm Fred relief.
$25 million for Golden L.E.A.F. The foundation will use the funds to help local governments plan or pursue resilience projects.
$20 million to create a Flood Resiliency Blueprint to guide flood mitigation projects.
$38 million to support flood mitigation in vulnerable areas.
$32 million in grants to local governments for flood mitigation and disaster recovery projects.
$40 million to the Coastal Storm Damage Mitigation Fund for grants to local governments for storm damage mitigation projects.
MILITARY AND VETERANS
Eliminates state income tax on military pensions.
$1 million to support and maintain military presence across the state.
$2 million to increase the number of scholarships awarded to eligible children of disabled veterans.
Provides state match for new veterans skilled nursing facility in Wake County.
$2 million for the No Veteran Left Behind project to assist veterans in crisis.
Expands veteran employment preference for state jobs to include members of the National Guard.
AGRICULTURE
Provides $129 million in COVID-19 federal relief funds for food banks, and meat, swine, and dairy producers.
Provides Forest Service with additional emergency response equipment.
Provides over $8 million for Farmland Preservation.
Fully funds the operating requirements for the new Steve Troxler Agricultural Sciences Center.
PUBLIC SAFETY
Appropriates $6.8 million for a domestic violence notification program with electronic monitoring units for pre-trial domestic violence cases and specialty courts.
$10 million for testing sexual assault evidence collection kits and eliminating the rape kit backlog.
Nearly $30 million to combat human trafficking and provide support services for victims.
Provides vital new positions including additional assistant district attorneys, deputy clerks, child advocates, magistrates, and judges.
$140 million for local courthouse construction, renovations, and repairs.
$5.6 million to improve safety at prisons over the next two years.
$4 million to support state search and rescue programs over the next two years.
TRANSPORTATION
$346 million over the base budget for highway maintenance and highway preservation activities.
Funds new inmate litter crew pilot project.
$12 million to municipalities for construction and maintenance of municipal roads and bridges
$3 million in federal funds for extended service at DMV Driver License offices.
Authorizes DMV to utilize online renewal for permits, licenses, and registrations.
OTHER ITEMS
Limits governor’s emergency powers by requiring approval from the Council of State to extend a statewide emergency beyond 30 days.
Prohibits collusive settlements by the Attorney General.
Includes Firefighters Fighting Cancer Act – a provision to assist firefighters dealing with work-related cancers.
