Gov. Pat McCrory said Monday he's unsure if he and fellow Republican legislative leaders can agree on a final North Carolina state government budget before the new fiscal year begins in two weeks.
In an interview, McCrory said it's still his goal to work out a two-year budget he can sign into law by July 1, thus avoiding the need for a stop-gap spending measure to keep government operating beyond that date while negotiations continue.
"We've got to come to a conclusion in a very short period of time," he told The Associated Press. "We've gotten this far. We're very close to the finish line but small things can also trip it up."
Negotiations are expected to begin in earnest after the Senate, as expected, rejected the House version of the budget Monday night. A conference committee will be formed to work out differences between the plans, which are only $12 million apart in overall spending for next year but far apart on dozens of spending and policy decisions.
McCrory, who offered his own plan three months ago and whose veto power gives him a role in negotiations, said he has problems with parts of both the House and Senate versions.
McCrory made specific critiques publicly about the Senate plan when it was released four weeks ago, such as the absence of funds to expand the number of slots for the state's pre-kindergarten program and to compensate victims of the state's former forced sterilization program. The House plan, which would spend $20.6 billion next year, has money to expand North Carolina Pre-K and to compensate eugenics survivors.
He hasn't been as explicit about problems he may have with the House version, noting that negotiations are nearing a critical time.
"I'm probably going to be a little more reserved in my comments," he said. The legislature could agree to pass a stop-gap spending measure, called a "continuing resolution," if they can't work out a decision before July 1. McCrory would be asked to sign that bill into law.
The budget will be debated largely behind the scenes at the same time Republicans from both chambers attempt to reach a compromise on a tax overhaul. The tax negotiations are important because they will help determine how much money the budget-writers have to spend based on a lower amount of state revenues that likely would be generated overall.
Both a tax plan approved by the House last week and a Senate version expected to receive final approval in that chamber Tuesday would lower income tax rates but differ markedly on sales tax changes. McCrory said he wants to back a final tax agreement that will reduce individual and corporate income tax rates to make them more competitive with rates in surrounding states.
McCrory said during the 2012 gubernatorial campaign that he also wanted a "revenue neutral" tax plan, meaning the proposal wouldn't immediately increase the state's share of revenue. When asked whether he would now seek a "revenue neutral" agreement, McCrory responded: "It's part of the negotiations."
He said he wants to make sure "the numbers that come out at the bottom provide sufficient revenue to run state government" and don't put a future governor at risk for future budget problems.