Governor Signs $20.7 Billion Budget

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Governor Signs $20.7 Billion Budget

Special Report - August 1, 2007
On Tuesday, July 31, North Carolina Governor Mike Easley signed into law a $20.7 billion budget after lawmakers in the General Assembly gave final approval to the spending plan the day before. House Bill 1473—2007 Appropriations Act, which passed the House 64 to 52 and the Senate 31 to 19, raises spending levels by almost 10 percent over last year’s budget. Among other changes, the bill makes permanent a 'temporary' state sales tax increase originally approved in 2001, increases education spending by roughly $1 billion, and reduces the amount of Medicaid expenses faced by counties. The budget also includes a five percent pay raise for faculty at public schools, community colleges, and public universities.

Due to a significant shortfall in lottery revenue during its first fiscal year of operation, the budget anticipates only $350 million in net lottery funds, $75 million less than the revenue included in the 2006-07 budget. In addition, lawmakers inserted a provision that ostensibly allows the State Lottery Commission to alter the payout structure of the numbers game. The new language directs the Commission to “allocate revenues to the North Carolina State Lottery Fund in order to increase and maximize the available revenues for education purposes.” In an effort to lure additional players to the state-sponsored numbers game and increase ticket sales, Governor Easley has pushed for increasing lottery prize payouts and decreasing the percentage devoted to educational purposes.

The newly approved budget also includes standard language that maintains eligibility restrictions on the State Abortion Fund, allowing the Fund to pay for abortions only in cases of rape, incest, or when the life of the mother is at risk. This provision, which has been enacted in every budget since 1995, has all but eliminated the state funding of abortions through the State Abortion Fund.