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Gov. McCrory Leaves Tax Overhaul Out Of Budget

Governor Pat McCrory released his detailed plan Tuesday for how North Carolina should spend its money the next two years. It's a $20.6 billion budget that does not include a key point from McCrory's campaign – overhauling the state's tax system.

Education takes up 55 percent of McCrory's budget.

He includes funding for an additional 5,000 at-risk children to take part in the state's pre-K program, and he sets aside $43 million to promote technology in classrooms, like reading tablets.

Plus, McCrory said, "Our budget prioritizes the money to hire 1,800 additional teachers over the next two years."

"Prioritize" is the key word there: the budget pays for those new teachers by cutting money for teaching assistants.

The governor's budget also re-establishes drug treatment courts and compensates victims of the state's eugenics program that ended in the 1970s.

And here's what McCrory said he's most proud of in his budget:

"We need to start replenishing our rainy day fund and also make sure we pay down our unfunded liabilities, which I talked about on the campaign trail many times," he said.

He points to Medicaid as an example, which he's budgeting an additional $575 million for.

Another thing he talked about a lot on the campaign trail was tax reform. But that's not in his budget.

Some Republican state legislators have floated the idea of getting rid of income taxes and imposing sales taxes on an assortment of services, like grooming your pet or getting a haircut. 

McCrory said raising any taxes on families right now is a bad idea "because we want them to have as much disposable income in their hands to help build the economy and pay for their child's education and pay for their mortgages and rents and groceries."

Catawba College Political Professor Michael Bitzer was surprised McCrory didn't address the tax code. But Bitzer said this could be a reason why: McCrory is still dealing with problems that were waiting for him when he took office. 

"Take, for instance, all the technology/infrastructure issues that he is identifying," Bitzer said. "He is going to be pumping in some major money to fix the computer infrastructure of the state to make it more efficient."

Now that state legislators have McCrory's budget, they'll put their own together and iron out the differences over the next few months.