News

State budget passes Senate, no priority pass fees

Ocracoke by air 2012

Ocracoke by air 2012. (Author unknown.)

By Connie Leinbach and Peter Vankevich

Good news for Ocracoke, the newly crafted state budget approved by the Senate Wednesday has no new attacks on the ferry system, having removed the Senate’s proposal to charge $150 for anyone wanting a priority pass on an NC ferry.

“Several of us who oppose the priority pass provision were able to get it out of the budget,” said Senator Bill Cook (R-District 1) when contacted.

The budget still has to be voted on by the state House and signed by Gov. Pat McCrory, but since this latest spending plan of $21.735 billion beginning next year is a compromise between both legislative houses, it will probably pass without much fanfare as soon as Friday. 

The state transportation section of the budget rose to $6,965,700 for 2016 to 2017, up from $5,019,700, according to section 29.2.(b) of the budget document online at www.ncleg.net.

According to that document, the DOT section of the budget dealing with ferries is relatively unchanged.

Money for shallow navigation channel dredging was raised to 1 percent, up from one sixth of 1 percent.

“There is $1.7 million in there to help with the long route and significant changes to dredging in our favor,” noted Ocracoke’s representative in the House Paul Tine (U-Kitty Hawk) when contacted.  

While the budget reduces personal income taxes by trimming the individual income tax rate from 5.75 percent to 5.499 percent, those savings may dissolve with the addition of sales tax on services heretofore not taxed, such as repair, maintenance and installation services, including car repairs.

The extra money those new sales taxes generate in urban areas would be redistributed to rural counties whose residents pay more in sales taxes than their local governments collect under the current system of taxation. So Hyde County may see an increase in revenues.

In addition, the budget increases a number of fees for the Department of Motor Vehicles.

For example, the fee for a new driver’s license rises from $15 to $20 for each year the license is valid–a $40 increase for an eight-year license.

The budget allows city and town governments to charge a $30-per-year local vehicle tax, replacing an existing $5-per-year tax. Of the $30, $5 can be used for any purpose, and $5 can be used to back public transportation. Any additional tax levied, up to $20, must be used for street improvements. Some cities, such as Raleigh, already have the ability to charge fees higher than $5.

 As for the solar tax credits that expire Dec. 31, they were not extended, Tine noted.

“ I felt that we should make some changes to the program but not immediately end the credit,” he said. “I believe energy diversification and energy security are important goals and North Carolina should play a role.  Unfortunately I was unable to maintain the credit.”

According to Utility Dive, which covers utility industry news, renewables advocates had been scrambling to save North Carolina’s tax credit, but Democrats say they were largely shut out of negotiations. Bids for a gradual phase-out, which would have allowed some projects completed early next year to qualify for the credit, also failed.

Senator Cook told the Ocracoke Observer he was against extending solar tax credits.

According to a press release by Cook, “the compromise plan includes a responsible 3.1 percent spending increase to keep pace with inflation, core priorities and additional appropriations for public education by more than $530 million in the first year alone–all while shoring up the state’s rainy day and repair and renovation funds by $600 million.

“(It) fully restores the state tax deduction for medical expenses. The budget also extends Historic Preservation Tax credits.”

Another provision of the budget gives the State Board of Education the authority to consolidate two different school systems if they are next to one another, but gives lawmakers the right to sign off an any such merger.

It also increases early-career teacher pay to from $33,000 to $35,000 per year. Chris Fitzsimon, director of NC Policy Watch, noted that in spite of all the bluster about raising teacher pay, many veteran teachers will receive no salary increase at all, only a one-time $750 bonus, which comes to about $62 a month before taxes.

The News & Observer also voiced concerns about the education budget, noting that hundreds of North Carolina elementary school teachers face an uncertain future now that the state budget is expected to block school districts from paying teachers with money set aside for teacher assistants.

It noted that the proposed budget maintains full funding for teacher assistants but takes away the flexibility school districts had to use that money for other purposes. Now school districts around the state are looking for ways to compensate the hundreds of teachers whom they’d been paying with teacher assistant dollars.

As an example, the newspaper pointed out that last school year, Wake County diverted $4.2 million for teachers from state teacher-assistant funding. Statewide, districts diverted $42 million to pay for teachers out of $376 million in teacher-assistant funding.  Read more here 

Tine said he would have a statement about the budget as soon as today. 

According to Cook’s press release Wednesday, highlights of the final state budget on coastal issues include:

  • Provides additional appropriations to the Shallow Draft Inlet Dredging Fund. Total estimated recurring funding is at $19.7 million. It reserves $3 million of that fund for Oregon Inlet dredging needs, but not capped at $3 million. Additionally, it reduces the local match of non-state dollars from a one-to-one match to a $1- to $3- match for tier 1 counties and $1- to $2- match for all other counties. (Hyde is a tier 1 county, which is based on a number of economic factors.) Appropriates $650,000 to the Department of Administration so they can begin the work required for a long-term solution at Oregon Inlet. 
  • Hatteras Inlet has been specifically designated for eligibility of the Shallow Draft Inlet Dredging Fund.
  • The Department of Environment and Natural Resources will receive $250,000 to update the Beach and Inlet Management Plan. The updated Plan shall include a recommended schedule for ongoing inlet maintenance. No later than December 1, 2016, the Department shall report to the Environmental Review Commission on the updated Plan, including a four-year cycle of regularly scheduled maintenance projects for beaches and inlets that currently undergo (or are expected to undergo) beach fill or dredging work.
  • Establishes a Deep Draft Navigation Channel Dredging and Maintenance Fund. The Department of Administration is requested to negotiate with the federal government to acquire the federally owned property needed to manage deep draft navigation channels at the Morehead City State Port facilities in trade for state-owned real property.
  • Allows all coastal municipalities and county governments by ordinance to remove abandoned vessels from their navigable waters.
  • Directs the Division of Coastal Management to study and develop a proposed strategy for preventing, mitigating, and remediating the effects of beach erosion. The study shall consider efforts by other states and countries to prevent beach erosion, ocean over wash and incorporate best practices into the strategy.
  • Directs the Coastal Resource Commission to amend its rules for the use of temporary erosion control structures in certain situations. It would allow the placement of temporary erosion control structures on a property that is experiencing coastal erosion. This provision will allow more flexibility regarding the placement timing and specifications of sandbags as well.
  •  Creates an enterprise fund for the North Carolina Marine Industrial Park. The enterprise fund shall be used for the operations, maintenance, repair, and capital improvements of the Wanchese Marine Industrial Park.
  • Supports three initiatives related to Oyster development (cultch planting, oyster sanctuaries, and oyster research to develop North Carolina oyster brood stock to provide seed for aquaculture) totaling just over $2 million over the biennium.
  • Requires the Division of Marine Fisheries to create a proposal to open certain areas of the Core Sound to shellfish cultivation leasing. There are some very lucrative lease sites in the Core Sound but cannot be used due to a lease moratorium law.
  • Amends the Senator Jean Preston Marine Shellfish Sanctuary. It requires the Division to develop a plan to construct and manage additional oyster habitat and requires that the new sanctuaries along with existing oyster sanctuaries be included in the Senator Jean Preston Oyster Sanctuary Network. Amends current statute to allow a shellfish cultivation lease survey to be produced by using global positioning system data.
  • Reforms the shellfish cultivation leasing process to which renewal leases would be issued for a period of 10 years, instead of 5 years.

“The shellfish cultivation industry in North Carolina could be a much larger part of our economy,” Cook continued in his release. “We import 75 percent of the oysters consumed in North Carolina, yet we have the second largest estuary system in the United States and the largest contained in one state.  Last year, Virginia’s cultured shellfish was valued at $64 million. Our state produced only $330,000 worth of cultured shellfish.”

NC State Senator Bill Cook.

NC State Senator Bill Cook.

Critical of the lack of  transparency, Fitzsimon of NC Policy Watch wrote that “there’s no way to cover everything in a 400-plus-page budget crafted in secret that spends $21.74 billion dollars and makes dozens of significant policy decisions.

“News stories can’t do it either. Legislative leaders know that. That’s why they stuff so many important provisions into the massive budget document, many of which have never been seen by the public or the media, not to mention rank and file lawmakers themselves.

“This absurdly non-transparent process is part of this year’s budget story. Most members of the Senate first saw the massive budget bill online at just before midnight Monday—if they were still awake—and were forced to vote on it just after 2:00 Tuesday afternoon.”

To read his full commentary on the budget and this process, visit NC Policy Watch here.