Legislative Report #05-20

Report 05-20
June 17, 2005

HOUSE ADOPTS BUDGET

The House of Representatives approved the state budget for the 2005-07 biennium on Thursday. There are significant differences in the budget bills that have been approved by the House and Senate. The House version of Senate Bill 622 has been sent back to the Senate. The Senate is expected not to concur in the House version and a joint conference committee will be appointed early next week to begin the task of resolving differences between the House and Senate proposals.

The main areas of difference between the House and Senate regarding the budget involve the tax packages that were included in both packages as well as significant differences in appropriations for public schools and human services.

Also, there are differences regarding Cost-Of-Living Adjustments for retired and active state employees, local government retirees, and changes in State Health Plan benefits. These key differences are presented below.

COLAS

The Cost-of-Living Adjustments proposed by House and Senate are compared in the table below.

                                          Senate    House 
Retired State Employees/Teachers           2.0%      2.0%
Retired Local Gov't. Employees             2.0%      2.5%
Retired Legislators                        2.0%      2.0%
Retired Members Judicial System            2.0%      2.0%
Active State Employees                     2.0%    $1,086 *

(*Note: The flat dollar amount raise proposed by the House is equivalent to 2.5% of the average state employee salary. The raise does not apply to teachers, university faculty or community college faculty. There are separate salary provisions for teachers and university/community college faculty.)

STATE HEALTH PLAN

There are significant differences in the Senate and House proposals regarding the State Health Plan. The Senate budget appropriates a total of $292 million for the biennium to maintain the Plan. The House proposes a $320.6 million appropriation for the 2-year period. Other differences are summarized below.

                                          Senate    House 
Dependent Premium Increase                  14.3%   15.8%
Annual Max. Out-Of-Pocket Increase         +$500      $0
Brand Name Drug Co-Pay Increase              +$5      $0
Generic Drug Co-Pay Increase                  $0      $0
Hospital Stay (1st day) Co-pay Increase     +$50      $0
Fac.Fees outpatient care Increase           +$50      $0
Emergency Room Increase                     +$50      $0

WHAT'S NEXT?

The Senate and House will appoint members to the joint conference committee next week. Usually, conferees cannot consider any changes in items that are identical in the House and Senate budgets, such as the state retiree COLA of 2.0%. However, we will urge the conferees to link the COLA for state retirees to whatever they do for active state employees in terms of a percentage increase to the extent that the conference committee rules permit. We do not believe that retired state employees should get less of a percentage increase than active employees.

With regard to the COLA for retired local government employees, we will ask the conferees to adopt the higher figure (2.5%) proposed by the House. Also, we will ask the conferees to accept the House proposals pertaining to the State Health Plan.

LEGISLATIVE WEB PAGE

A number of our members have asked how they can find the e-mail addresses of their legislators. You can go to the General Assembly web page www.ncga.state.nc.us and, under House or Senate, pull up the member list. If you click on the name of a member, you will see their individual e-mail address and legislative office phone number.

The list of budget conferees also should be listed on the General Assembly web page by next Wednesday. Please contact us if you have questions. Thanks for your continuing support.