July 26, 2013

State budget is on its way to the governor


On Wednesday, July 23, the North Carolina House and Senate both approved the 

Because of recent changes in tax laws, reserve balances will drop $86.6 million in the current budget ending June 30, 2014 and by $437.8 million in the following fiscal year.

The $20.6 billon budget has some good news for the Outer Banks but also some not so welcome changes.

Increases in the cost of commercial and recreational fishing licenses found their way into the bill but the largest increase targets piers.

Pier owners have been paying 50 cents per linear foot for the privilege of operating a business that caters to fishermen. The license includes a provision that provides a “blanket license” which allows fishermen to fish without obtaining individual licenses. That fee is being increased to $4.50 per foot. 

The Hatteras-Ocracoke ferry dodged the bullet on being tolled for at least the immediate future. That ferry route is the only free access to Ocracoke Island. The Department of Transportation can later place a tax on the route if the local transportation planning advisory committee approves a resolution supporting such action.

Recreational fishing tournament organizers now will be allowed to sell the tournaments’ catches to licensed fish dealers. Any revenues must be given to charitable or educational entities.

Changes to the unemployment insurance law also are reflected in the budget.

The budget reduces Unemployment Insurance Reserve from $23.8 million in the current fiscal year to $13.6 million in the 2014-15 fiscal year. The reduction is due in part to unemployment insurance benefits being cut July 1. A budget change made in the appropriations technical corrections bill released Friday, drops a $10 million appropriation into the fund and replaces it with any unspent appropriations available from the Department of Commerce and the Office of State Controller at the end of the current fiscal year.

“I can’t imagine that this will be good for small businesses,” said Dare County Commissioner Allen Burrus. “If we are not going to be tied to the federal pool, it will make it harder to fund. Why would be doing that? It will mean that small businesses may have to pay more.”

The change reduces the benefit and caps the amount from a high of $535 to $350 and reduces the maximum number of weeks from 26 to, in some cases, 12. North Carolina has one of the largest unemployment rates in the country, and Dare and Hyde counties’ winter unemployment rates are customarily in double digits due to the seasonal nature of the area.

Wanchese Industrial Seafood Park on Roanoke Island will receive funding in the current fiscal year that ends June 30, 2014 but will be on its own after that with no funding included for the 2014-15 fiscal year when the industrial park is expected to be self-supporting.

Also on Roanoke Island, the Roanoke Island Commission will receive $450,000 in funding to use for the support of Festival Park. No funding is included in the next fiscal year.

The budget appropriates $1 million to offset costs of complying with the new proposed elections laws aimed at reducing the amount of time allotted for early voting, mandating paper ballots, requiring a photo identification, eliminating same-day registration and voting, reducing the hours for Saturday voting, and a long list of other changes.

Dare County Board of Commissioners Chairman Warren Judge said that the financial impact of the election laws changes is now under scrutiny and that an estimate might be available next week.

Education at all levels is being funded at a rate reduced from previous years. According to the North Carolina Educators Association, the cuts for grades K-12 will reduce the number of teachers by approximately 5,200, eliminate 3,850 teaching assistants, and drop almost 300 support staff.

The appropriations technical corrections bill filed on Friday, transfers an additional $2 million from the Department of Public Instruction to the Governor’s Office to fund the North Carolina Workforce and Innovation Commission for the current fiscal year; $200,000 of that amount is noted as being for technical and administrative assistance, including staff for the commission and for commission reimbursements and expenses.

In addition to other cuts, the university system will lose $32.14 million in 2013-14 and $52.7 million in 2014-15 for university institutional programs.

The North Carolina Center for the Advancement of Teaching campus on Ocracoke was funded for this fiscal year, but nothing is included for the center in the budget for 2014-2015.

Although not part of the budget, a separate tax reform bill removes an exemption for paying sales tax that benefits members of the Cape Hatteras Electric Cooperative. If the minds of lawmakers can't be changed, CHEC members will begin paying 6.75 percent sales tax on their electric bills, beginning on July 1, 2014.

The class of some misdemeanors will be changed to avoid providing indigent defense. This will reduce the budget by $4 million in the 2014-15.

The budget is being enacted in the same year as a major overhaul of the state’s tax code which is expected to result in less revenues going into state coffers. The General Assembly will meet again in May 2014 and if necessary, can at that time change the budget for the 2014-15 fiscal year.


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