Legislative leaders released highlights of a $24 billion spending plan for 2019-20 while girding for a budget battle with Gov. Roy Cooper.

Senate leader Phil Berger, R-Rockingham, and House Speaker Tim Moore, R-Cleveland, held a news conference with legislative budget chairmen Tuesday, June 25. They outlined teacher and state employee pay raises, increased education spending, a compromise on how to fund billions of dollars in school construction, and a $710 million appropriation to the state rainy day reserve, raising it to $1.96 billion by 2021.

State employees will get a 5% increase over the two-year budget cycle, and retirees will receive a .5% pay supplement each of the two years of the biennium. Teachers will receive an average 3.9% pay hike over the two years.

 “We’re very pleased that the Senate and House got together and agreed that it’s time to prioritize state employee pay, which has been on the back burner for decades now,” said Ardis Watkins, spokeswoman for the State Employees Association of North Carolina. “It’s an important step to say state employees are a priority.”

She noted the retiree COLA was not in either chamber’s budgets and was happy Berger and Moore subsequently sat down with SEANC to include the compensation bump.

After days of meetings between GOP budget writers, Cooper, and their staffs failed to elicit a counterproposal from the governor, Republicans decided to release the budget Tuesday. 

They expressed disappointment that Cooper criticized a few key components of the budget without presenting a comprehensive compromise. They noted time was running out to pass a budget before the fiscal year ends June 30. Cooper on Tuesday requested the General Assembly delay budget action until the new fiscal year starts.

“We don’t think that’s responsible, but we can change the budget at any time we get a legitimate counter offer,” Berger said of Cooper’s inaction. Procedural mechanisms would allow lawmakers to amend the budget even after the conference report is read in during floor sessions. 

One policy provision woven into the budget allows for a special session to be held on health-care issues, including Medicaid expansion, a Cooper mandate that’s not part of the budget. Certificate-of-need reforms that were being hashed out by House and Senate budget negotiators did not get included in the final plan.

Cooper has indicated he would veto the budget if it didn’t include Medicaid expansion. 

Asked if Republicans were counting votes yet to determine whether they could sway enough Democrats to their side to override a veto, Berger told Carolina Journal after the meeting “We’re having conversations.” Whether he’s optimistic, he said, “I’ll be confident once we take the vote as to what the outcome is.”

Moore said the budget includes $14.2 billion for public education, a record. Total commitment to K-12 capital funding for new schools and repairs is $4.4 billion over 10 years, combining $1.5 billion from the State Capital and Infrastructure Fund, $1 billion from the Public School Capital Fund, and $1.9 billion in needs-based capital funding.

That is the pay-as-you-go approach advocated by the Senate. The House budget included a bond issue to pay for school construction, the same choice Cooper preferred but at a much higher cost.

The budget fully funds requirements for the State Health Plan and retirement systems. It includes reductions in the franchise tax, and increases in the amount of money not taxed for personal income.

Moore said a squabble between Vidant Medical Center, the UNC System Board of Governors, and lawmakers was resolved. 

The budget fully restores $35 million in Medicaid reimbursement cuts to Vidant and approves construction of a new Brody School of Medicine for East Carolina University. The governing board will return to its previous arrangement, with the BOG appointing 45% of the membership and the Pitt County Board of Commissioners 55% of members.