State Budget Process
Traditionally, the House and Senate alternate starting the biennial budget process, and this session it is the Senate’s turn. Usually, the first chamber releases its budget between late April and early May and the second chamber releases its budget by mid-June. Since legislative leaders have still not come to an agreement on how much to spend on this year’s budget, the Senate has not yet submitted its budget proposal. At this rate, the first version of the budget won’t be released until mid-June, if at all.
The Senate’s delay in releasing a budget proposal has prompted the House to proceed with its own version of the budget. The House has scheduled its first round of budget hearings next week, and although it’s not against tradition for both chambers to simultaneously work on the budget, it would go against tradition if the House released its version of the budget before the Senate. House Speaker Tim Moore’s spokeswoman told WRAL news that “We hope the Senate will send us their budget soon, but the House will be passing a comprehensive two-year budget at some point this session, regardless.” Meaning that this year we could end up with two very different proposed budgets and spending priorities. Senate leader Phil Berger does not seem to have a problem with the Senate’s handling of the budget process, as he is quoted saying, “It’s not the end of the world if we don’t end up passing a traditional budget.” As a reminder, the State has not had a new budget since 2018 but has instead relied on mini budgets to make year-to-year adjustments. NCSBA will continue to monitor the budget process and keep you informed on any new developments. Click here for an article on the budget process.
Notable Bills with Action This Week
SB 172: Additional 2021 COVID-19 Response & Relief (primary sponsors: Senators Brent Jackson, R-Sampson; Kathy Harrington, R-Gaston; Ralph Hise, R-Mitchell) was signed into law (SL 2021-25) by the Governor on Monday. This bill appropriates COVID-19 relief funds, including $3.2 billion in Elementary and Secondary School Emergency Relief III (ESSER III) funds included in the American Rescue Plan. This is the 90% of ESSER III funds that go directly to public school units (PSUs), while the other 10% goes to DPI. 20% of the PSU funds are required to address learning loss, and all ESSER III funds expire on September 30, 2024. Click here to access DPI’s planning allotments of these ESSER III funds. Additionally, SB 172 ensures that each PSU receives at least $400 per student in federal grant funds and includes supplemental IDEA funds (Individuals with Disabilities Education Act).
HB 947: The G.R.E.A.T. Broadband Expansion Act (primary sponsors: Representatives Dean Arp, R-Union; Donny Lambeth, R-Forsyth; Jason Saine, R-Lincoln; Jake Johnson, R-Polk) passed the House 109-0 and is now in the Senate. This bill makes changes to the Growing Rural Economies with Access to Technology (G.R.E.A.T.) program and creates a process to utilize federal COVID-19 relief funds for the program. The funds will be used to connect all 100 counties to broadband infrastructure, with the goal of reaching unserved and underserved areas. Although no House Democrats voted against HB 947, many said that the bill did not do enough in helping people pay for internet service.
HB 334: JOBS Grants and Tax Relief was rewritten by the Senate to be a bill that uses federal funds to provide up to a billion dollars in grants to businesses affected by COVID-19 and to provide tax cuts to businesses and individuals. The tax cuts include a reduction in the personal income tax rate from 5.25% to 4.99%, an increase in the standard deduction and child deduction, phase out of the corporate income tax over five years, and a reduction in the franchise tax. The tax changes produce a reduction of General Fund revenues equal to $568 million in the 2021-2022 fiscal year and $2.1 billion by the 2025-2026 fiscal year. Senate leaders have said that future revenue growth will be sufficient to handle future expenditure needs, but there has been no five-year projection of revenue and expenditures released by the legislature’s nonpartisan fiscal staff. Since K-12 Education makes up 40% of the General Fund budget, future revenue availability is important. HB 334 was approved by the Senate Finance and Appropriations committees and referred to the Senate Rules Committee.
This week at the legislature began with a virtual news conference of Democratic legislators and education advocates calling on legislative leaders to consider HB 946: Sound Basic Education for Every Child (primary sponsors: Representatives Julie von Haefen, D-Wake; Rachel Hunt, D-Mecklenburg; Raymond Smith, D-Wayne; Ricky Hurtado, D-Alamance). This bill is another piece in the long-standing Leandro case, and follows the State Board of Education’s and DPI’s submission of a comprehensive remedial plan to the State Superior Court on March 15. HB 946 includes some of the remedial plan’s action steps on how the State can fulfill its constitutional obligation of providing every student with access to a sound, basic education. Click here for an article on the news conference.
Click here for an article covering legislative action this week.
On Monday Governor Roy Cooper announced how he plans to use $51.4 million in federal funding, a majority of which will help students access postsecondary education. These federal dollars are the State’s share of the Governor’s Emergency Education Relief (GEER) fund. Using $31.5 million, the Governor will launch the Longleaf Commitment program to aid graduating high school seniors from low- and middle-income families with at least $2,800 in federal and state grants to cover tuition and most fees at any of NC’s 58 community colleges. Click here to access the Longleaf Commitment webpage, which includes eligibility requirements and guidance on how to apply. Additional GEER funds will be used to launch the Longleaf Complete program, which will help current college students complete their degree, and to invest in the following supports that will benefit K-12 education:
- A $825,000 grant to the nonprofit Communities in Schools to teach 11th and 12th grade students workplace skills
- $750,0000 to create a dashboard to track the State’s education recovery from the COVID-19 pandemic
- $650,000 to expand digital literacy programs
The first round of GEER funds was received in August 2020 and has been used to hire K-12 student health and academic support staff and to provide financial aid to college students. The funds awarded on Monday include remaining GEER I funds, as well as GEER II funds. Click here and here for articles on the distribution of the GEER funds.
On Wednesday, myFutureNC hosted a webinar sharing information about the new Longleaf Commitment program. Click here to access the recorded webinar and click here to access the webinar presentation slides.
Click here for a FAQ created by the U.S. Department of Education as guidance for the use of GEER funds and ESSER funds.
On Wednesday, the SBE met to approve agenda items pertaining to ESSER funds, including temporary positions at DPI that will aid in the administration, monitoring, compliance, and impact analysis of ESSER III funds allocated to PSUs. Click here to access the meeting agenda and materials.
Tuesday, June 1
2:30 pm – Senate Rules – Legislative Building, rm 1027/1128 (live stream)
Wednesday, June 2
8:30 am – House Appropriations, Education – Legislative Offices Building, rm 425
Director of Governmental Relations
N.C. School Boards Association
Assistant Director of Governmental Relations
N.C. School Boards Association
Governmental Relations Research Specialist
N.C. School Boards Association