The Latest: N Carolina gives initial OK to budget adjustment

RALEIGH, N.C. (AP) — The Latest on debate on the North Carolina House budget (all times local):

6:35 p.m.

The House has given initial, bipartisan approval of recommended adjustments to the second year of North Carolina’s current two-year spending plan.

The chamber voted 103-12 Wednesday evening for the $22.2 billion legislation. Republican budget-writers used surplus tax collections and Medicaid savings to fund teacher and state employee pay raises, place $300 million in savings and put $164 million aside for building repairs and renovations.

House Minority Leader Larry Hall of Durham criticized the plan for not going far enough with pay raises and blamed artificial spending limits by GOP legislators.

Wednesday’s debate was less contentious compared to previous years and lasted less than four hours. A final House vote was expected Thursday before the legislation heads to the Senate for consideration.

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3:25 p.m.

The full North Carolina House has started debating its proposed budget adjustments for next year.

Senior budget chairman Rep. Nelson Dollar of Cary told colleagues on the House floor Wednesday afternoon the $22.2 billion plan is responsible and funds the state’s critical needs. The measure provides permanent pay raises for most teachers and most state employees. Most workers also would get bonuses.

The debate was expected to last several hours before the first of two required votes on the bill. Another vote would occur Thursday.

House Republicans are benefiting from higher tax collections and savings in Medicaid to locate money for compensation increases and for a provision to raise standard deductions annually through 2020, resulting in tax breaks.

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2:35 p.m.

Senate Republicans are creating a difference with their House counterparts in the upcoming North Carolina budget negotiations when it comes to taxes.

The Senate Finance Committee voted Wednesday for legislation that would raise the standard deduction both this tax year and in 2017. It’s expected to be inserted into the Senate’s budget proposal when it’s considered in the next couple of weeks.

The House budget proposal being debated later Wednesday on the House floor increases the standard deduction by the same amounts as the Senate provision, but it would be raised incrementally through 2020. A married couple filing jointly ultimately would save more than $100 because less income would be subject to taxes.

Senate bill sponsor Sen. Bob Rucho said he didn’t think taxpayers should have to wait for the tax break, which would mostly benefit low- and middle-income filers. No one on the Finance Committee voted against the bill.

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4 a.m.

This year’s budget process is moving quickly in the North Carolina House.

The full House plans Wednesday to debate and then hold the first of two required votes on proposed budget adjustments. The adjustments are for the second year of the two-year budget approved last September.

The $22.2 billion spending proposal cleared two House committees Tuesday after lawmakers considered almost 50 amendments. The first floor vote wasn’t expected until Thursday but House leaders agreed to move it up a day.

The measure authorizes spending $500 million more than what was approved for this year. Higher tax collections and lower Medicaid expenses allowed GOP budget-writers to provide teacher and state employee pay raises and higher standard deductions on state income taxes.

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