Budget Approved

Lawmakers have approved and sent to Gov. Mike Easley for his signature a nearly $21.4 billion state budget bill. Following its initial approval Monday night in both chambers, the spending plan for this fiscal year was approved 97-20 in the House and 32-14 in the Senate. Now lawmakers hope Easley will sign the bill into law. He was unhappy at times with his fellow Democrats during two weeks of intense House-Senate negotiations. But legislative leaders ultimately agreed before the July 4 weekend to delay by a year a pair of tax breaks and make some spending reductions. Easley had demanded changes after tax collections missed estimates by a total of $63 million in May and June. Easley's office hinted late Tuesday that the governor was pleased with the changes. Easley, who is in his eighth and final year in office, has never vetoed a budget bill. "The governor hasn't fully reviewed the bill at this point, but he believes there has been some positive movement," Easley spokesman Seth Effron said.

A majority of House Republicans joined Democrats in voting for the final spending package, which adjusts the second year of a two-year budget. They were pleased with the pay raises given to public school teachers and state employees despite a slowing economy. And the overall spending increased by less than 3.4 percent, less than half the growth rate of 2006 and 2007. "The overall spending trend is down considerably from what we have seen the Democrats do in recent years," said Rep. Nelson Dollar, R-Wake, who voted for the bill. "There were no tax increases for a change."

But other Republicans said the budget authorized too much debt -- $857 million over the next four years -- to construct 1,500 additional prison beds, university and state buildings. None of the borrowing requires voter approval in a referendum. The bill also provides seed money for another $1 billion in capital projects that GOP members argued if carried out ultimately could threaten the state's prized triple-A credit bond rating. They also say it may require additional taxes to pay for other needs such as transportation. "We are on our way to maxing out our credit limit," Senate Minority Leader Phil Berger, R-Rockingham, said during Tuesday's brief debate. Democrats contend the borrowing remains reasonable and is needed to prepare the state for a population projected to grow from 9 million today to 12 million in 2030.

The budget bill includes a few tax cuts and the phase-out of a $172 million annual payment siphoned from a dedicated road-building fund. It also gives $25 million to help begin construction on a proposed toll road circling Raleigh and sets aside an extra $14.2 million in lottery funds to boost construction funding in school districts that have received less under the current formula. In addition, the measure directs officials to require all state agencies to develop a unified e-mail system by Jan. 1, 2010. A consolidated system will make it easier to store public, electronic records. (Gary D. Robertson, THE ASSOCIATED PRESS, 7/08/08).