The North Carolina Legislature has still not agreed on a state budget, including any possible commercial casino and video lottery terminal expansion.
The state fiscal year, which began July 1, had been the target date for the new budget, but lawmakers in charge of reaching a compromise between the House and Senate have encountered delays.
Based on reporting from WRAL’s Brian Murphy, “the ongoing negotiations combined with previously scheduled vacations and national conferences are likely to push any budget votes into the middle of August.”
After passing online sports betting in North Carolina in June, the budget talks became a late-game opportunity to expand legal gambling further through more casinos in North Carolina and video lottery terminals. Those two options are still on the table though contingent upon other key agenda items.
Tax cuts or pay raises?
An Upper-Lower Chamber divide has prolonged negotiations around tax cuts. The Senate wants to incrementally lower the individual tax rate from 4.75%, where it stands today, to 2.49% by 2030. Such a swift incremental decrease would lower taxes faster than the current law allows. The House has shown skepticism in adopting that timeline.
Rep. Jason Saine, who chairs the conference committee that will decide on the budget, has indicated House members would rather see tax cuts tied to state revenue indicators. In speaking to reporters Wednesday, Saine explained his reluctance to sign off on tax cuts untethered from any state revenue.
“Most House members in my caucus are not comfortable,” Saine told reporters. “They certainly love tax reform. They certainly want to reduce taxes. But without those triggers, they just want to make sure we aren’t short-changing our responsibilities in the future.”
In a related divide, Democrats have criticized Republicans in both chambers for spending less on state workers, pensioners and educators. Job vacancies, poor infrastructure and teacher shortages are the major pain points facing the state.
Attorney General Josh Stein, who is running for governor in 2024, joined Democrats in making their case. In a statement to reporters, he cited the need to expand Medicaid as well as fund schools and retain law enforcement.
Casinos still up for debate but not a budgetary hold-up
After talks stalled about including commercial casinos in House Bill 347, North Carolina’s online sports betting law, lawmakers interested in adding more casinos beyond the state’s three tribal casinos turned the casino debate to the state budget.
Senate leader Phil Berger and embattled House Speaker Tim Moore are heavily involved in the budget negotiations. Both are also familiar faces in gambling-expansion debates.
While the Senate has pushed for casino expansion to subsidize tax cuts, Saine told WRAL that “no definitive proposal has been made by the Senate, making it difficult for House Republicans to discuss the issue or consider its impact.”
Saine indicated that casino expansion is “looming over the debate,” but it is not the reason for budget gridlock. He is not alone. Moore also indicated that gambling expansion is not why lawmakers have not agreed on a budget while Berger told reporters on Thursday night that he thought the chances of casino expansion making it into the budget were “better than 50-50.”
State budget bottom line
How to spend $29.8 billion? That’s the task of lawmakers. Right now, the House and Senate have some qualms with where the other is allocating some state revenue.
With lawmakers set to go on vacations at the end of the month, the need to iron out details about tax cut schedules, state employee retention and even casino expansion may get delayed until the first or second week of August.
“We could do tax reform. We could do casinos. We could do them both,” Saine said to WRAL. “But until we know exactly what they’re going to look like, it is a little difficult.”
The addition of online casinos, such as DraftKings NC casino, has not yet been discussed.