BRADENTON, Fla. - North Carolina Gov. Pat McCrory signed the 2017 budget bill into law.
The bill, signed Thursday after the governor returned from vacation, technically adjusts the second year of the biennial spending plan to account for new revenues, according to a spokesman for the Office of Budget and Management.
The fiscal year began July 1.
The 2017 budget increases the general fund by 2.8%, for a total of $22.3 billion.
Unlike last year, when the state budget was signed nearly three months after the 2016 fiscal year began, there were no major disagreements over spending and McCrory did not use his veto pen.
McCrory, a Republican who is running for re-election, signed the state budget at a Union County elementary school while touting the teachers' pay increases and income tax cuts for "middle class families" that it affords.
"This budget further fulfills my vision to increase average annual teacher pay to $50,000 for the first time in state history," he said, adding that it also addresses affordable college tuition and investments in mental health services.
Under the plan, teachers will see an average 4.7% wage increase, while the standard income tax deduction will rise over the next two years to $17,500 from $15,500 for a married couple filing jointly.
Tuition at three state colleges will drop to $500 per semester for in-state residents, and $20 million will be used to implement recommendations of the Governor's Task Force on Mental Health and Substance Use.
McCrory also made provisions to use a portion of the $425 million surplus anticipated from the close out of fiscal 2016 books.
He said the state will place $473 million into the state's rainy day fund, bringing the reserve to an all-time high of $1.6 billion.
Still on McCrory's desk is House Bill 805, a technical corrections budget bill that would transfer $500,000 in nonrecurring funds from the state's Emergency Response and Disaster Relief Fund to the governor's office.
HB 805 authorizes McCrory to use the money to defend House Bill 2, the so-called "bathroom bill," which requires transgender people to use public bathrooms that conform to the sex on their birth certificate.
A U.S. District Court hearing is set for Aug. 1 on a lawsuit challenging the law filed by several North Carolina gay residents.
McCrory also filed a lawsuit against the U.S. Justice Department in May after the agency said that HB 2 violated federal civil rights laws, and that threatened certain federal funds received by the state and public universities.
The North Carolina General Assembly ended its annual session July 1, sending the budget to the governor but failing to pass two high-profile bills.
A proposed constitutional amendment by the Senate that would have asked voters in November to cap the state income tax rate at 5.5% failed to get through the House.
Sponsors have vowed to refile the measure next year.
A House-passed bill that would have killed North Carolina's first public-private partnership – the I-77 project in the Charlotte region – failed to get a committee hearing in the Senate and died.
On Thursday, North Carolina won triple-A ratings from all three major rating agencies for its upcoming competitive sale of $200 million in general obligation bonds.
The bond issue, to price July 27, is the first of several tranches in the voter-approved $2 billion Connect NC program, which will finance infrastructure projects across the state.
