New draft of NC state budget gives insights into legislators’ plans. Read it here.

UPDATE: GOP legislative leaders announced Tuesday night they would drop a contentious proposal to expand casinos and other gambling and vote on a state budget that will trigger Medicaid expansion, as lawmakers originally planned, on Thursday and Friday.

The News & Observer has obtained a copy of a state budget draft ahead of a possible long-awaited vote this week by state lawmakers.

Republicans have kept budget details behind closed doors for months while negotiations between House and Senate Republican leaders on a range of issues dragged on throughout the summer, notably on whether to include controversial legislation to sanction the opening of four new casinos and legalize the use of video lottery terminals.

Now a $30 billion budget is expected to be voted on by the House. On Monday evening, The N&O obtained a 611-page draft that had been circulating among lawmakers.

The draft appeared to have been revised as recently as Monday afternoon. It wasn’t immediately clear if this version was the one that House Republicans expected to unveil as early as Tuesday and vote on as early as Wednesday.

Speaking to reporters on Tuesday, Moore emphasized that the document was a draft, but confirmed that many of the major policy provisions would remain the same in the final version. He said negotiators were currently signing on to the final bill and he planned to release it on Tuesday afternoon.

Raises for teachers, state employees

Under this draft, most state employees would receive raises of 7% over the next two years — 4% in the first year and 3% in the second. By comparison, the budget proposed by the House earlier this year would’ve given employees a two-year raise of 7.5%. The Senate’s proposal had called for a 5% raise over two years.

Moore said the budget also includes an average 7% raise over two years for teachers.

Tax cuts

Income tax cuts closely resemble the House’s original proposal from March, which called for a 4.5% tax rate in 2024, decreasing to 3.99% after 2026. Monday’s budget draft shows the same 4.5% rate for 2024, but an accelerated reduction to 3.99% after 2025.

The Senate’s original budget proposal, released in May, would have continued tapering taxes to a 2.49% rate after 2029.

Investigations of judges

The new budget also includes some major policy proposals.

The bill would change the appointment structure for the Judicial Standards Commission, which investigates complaints against judges. It removes the four appointments given to the State Bar Council and transfers them to the legislature.

Supreme Court Justice Anita Earls is currently suing the commission, arguing that its investigation into her comments about diversity in the courts system violates her First Amendment rights.

Also included in the budget is a provision raising the retirement age for appellate judges from 72 to 76. This is likely targeted to help Republican Chief Justice Paul Newby, who is currently 68 but would be 73 by the end of his term.

School vouchers

The bill includes a massive expansion of Opportunity Scholarships, the state’s school voucher program. In addition to investing hundreds of millions of dollars in the program, the budget would also remove income eligibility requirements, allowing any family to apply for the funds.

It also includes $500 million for NCInnovation, a nonprofit aiming to assist UNC System researchers in creating businesses.

Casinos

The Senate and House, which both have Republican supermajorities that can override Democratic Gov. Roy Cooper’s vetoes, earlier this year released and passed separate budget versions that then needed to be reconciled.

The Senate pushed in recent months for the compromise version to include casinos, while the House said it did not have enough votes to pass the budget with casinos included.

Talks between leaders of both chambers, Senate leader Phil Berger and House Speaker Tim Moore, appeared to break down last week over the question of how and whether to advance the gambling proposal, but then resumed later in the week.

Medicaid expansion

During a conference call over the weekend, House Republicans discussed a new idea to resolve the budget impasse: voting on the budget on its own, while putting the gambling proposal into a separate bill that would also allow the expansion of Medicaid agreed upon earlier this year to go ahead. As of now, Medicaid expansion is set to take effect once the budget becomes law, giving health insurance to hundreds of thousands of people who didn’t have it.

House Appropriations Committee Chair Jason Saine confirmed to The N&O on Sunday that the House would proceed with votes this Wednesday and Thursday on the budget, and on the standalone casinos bill that would need to pass to trigger Medicaid expansion.

The N&O also obtained a copy of that legislation on Monday.

The 49-page bill, titled “Gaming and Medicaid Modifications,” includes both the video lottery terminals and casino proposals, as well as a third section that stipulates that Medicaid expansion won’t go into effect until the passage of the combined bill, House Bill 149.