Yesterday, the Senate passed its version of the budget. In last year’s budget we cut $2 billion in spending and in this year’s we cut close to another $1 billion, while protecting the core services the State provides. Our three top priorities in this year’s budget are job creation, retention and development, government efficiency, and protecting education. This budget brings government spending down to its lowest level in four years with per-capita spending down 3.5%.

Education
Public K-12 Education comprises over 37% of the State’s total budget. Over $200 million was cut from this year’s budget, an approximate 3% cut. Despite these cuts, we were able to prevent any teach layoffs and focus on funding areas to improve classroom performance in the K-12 system.
As a very last resort to avoid layoffs, this budget allows for school districts to consider 2-day furloughs to avoid teacher layoffs and requires local education boards to hold public hearings before furloughing teachers.
Our Community College system continues to see large growth. Our community colleges serve an important role of helping to create an educated workforce that will allow North Carolina to remain a competitive state for businesses to relocate and grow. In this budget we were able to fully fund the community college enrollment increase, 31,000 students this year alone. Likewise, we were able to fully fund enrollment increases in the UNC System.
As we recover from the recent economic recession, it is important that we place ourselves on firm footing and good educational system from kindergarten through college is one of the best tools we have.

Health and Human Services
Health and Human Services, over 20% of the budget, had its budget cut by over $400 million in state taxpayer money, a 9% cut. Much of these cuts will be offset by federal matching money. With these cuts and the help of federal matching money from the American Recovery and Reinvestment Act, we were able to expand healthcare coverage for more than 2,750 children through the Health Choice program. Health Choice is a program to provide healthcare coverage for the children of working families who make too much money to qualify for Medicaid. With this increase, a total of 137,789 children will be in the program. We were also able to restore $40 million of damaging cuts to the mental health system.
The budget also makes steps to crack down on Medicaid waste, fraud and abuse, saving taxpayers $36 million. It also reforms the Personal Care Services to fund only medically necessary services, saving an additional $59 million.

Justice and Public Safety
Justice and Public Safety, which I am a co-chairman of, accounts for close to $2.1 billion, about 11% of the total budget, was cut by more than $83 million, almost 4%. The Justice and Public Safety portion of the budget funds our court system, the Department of Justice, Correction (including probations), and Crime Control and Public Safety. Even with these cuts, we were able to continue reforming the State’s probation system and maintain staff in the District Attorney offices to help reduce backlogs in the courts.

• $9.5 million for the statewide expansion of CJLEADS, a new data system to track probationers
• $4.7 million for the VIPER Communication network to improve communication among law enforcement
• $6 million for gang prevention and intervention including $1.8M to enhance GangNet, a law enforcement database on gangs
• Cut $20 million from inmate medical cost

Jobs

A large focus of this year’s budget was on job growth and retention and helping laid-off workers. Small businesses are the backbone of the state’s economy. The majority of people employed in North Carolina are employed by small and mid-sized businesses. It is important that we help small businesses during this economic recession to maintain operations and keep workers employed.

Supporting small businesses

• Lowers the tax rate on small businesses to from 7.75% to 6.9%. This will lead to tax cuts for 275,000-300,000 small businesses in North Carolina.
• Loans to help small businesses keep their doors open ($1 million more to Small Business Assistance Fund through the NC Rural Economic Development Center, which will allow businesses with 100 or fewer employees loans to them stay open and preserve jobs).
• $1.5 million for the One NC Small Business Fund to help small businesses leverage federal entrepreneur grants.
• Set aside a portion of One NC Fund, which is used to help employers locate or expand in NC, to be used help small businesses grow.
• $5.7 million for Small Business Centers at 58 community colleges, which supports the development of new businesses and the growth of existing businesses by being a community-based provider of training, counseling, and resource information
• $150,000 to build “In-source NC” database to help NC companies find and use other NC companies for supplies and services

Recruiting new employers and expanding business

• Protects business development and job recruitment funds that have helped create and protect thousands of jobs ($15 million for One NC Fund, $5.5 million for JMAC)
• $5 million for our regional economic commissions that promote the state’s seven regions and attract new businesses and employers
• $875,000 to promote and market North Carolina as a business destination

Helping communities grow

• Protect $26 million in economic development grants, which include water and sewer infrastructure, for rural areas.
• Funds for marketing for NC agriculture.
• Funds Clean Water Management Trust Fund at $50 million to help local governments with water and sewer needs and create 3,000 construction jobs in rural North Carolina

Improving workforce training

• Protects last year’s $9 million for vocational and technical education at community colleges to boost job training programs in transportation, engineering
• $1m for “Tar Heel Works” program to provide enhanced skills training opportunities to those receiving unemployment benefits

Protecting homes from foreclosure

• $2.2 million for the Home Protection program which helps laid-off workers keep from losing their homes
• Maintained $10 million in funds for the Housing Trust Fund and a provision to allow $160 million in federal housing funds for the Housing Trust Fund