News: CJ Exclusives

Budget Deal Boosts Starting Teacher Salaries, Gives Others $750 Bonuses

$21.735 billion General Fund spending plan 3.1 higher than previous budget

Top legislative leaders on Monday outlined some of the highlights in the $21.735 billion General Fund budget for 2015-16. They include increasing salaries for beginning teachers in the state from $33,000 to $35,000, fulfilling a promise made last year.

The budget also provides $750 one-time bonuses for state employees and other teachers, ends transfers from the Highway Fund to the General Fund to pay for the State Highway Patrol, gives troopers and correction officers an additional bump in pay, and provides money affording additional students from lower income families the opportunity to use vouchers to attend private schools.

“The compromise plan includes a responsible 3.1 percent increase in spending, invests hundreds of millions of additional dollars in public education and other core priorities of the state, shores up the state’s rainy day fund and the repair and renovation fund by a total of $600 million,” said Senate President Pro Tem Phil Berger, R-Rockingham, at a news conference in the Legislative Building. That breaks down to $450 million for the rainy day fund and $150 for repairs and renovation.

According to Rep. Chuck McGrady, R-Henderson, however, $250 million of the $450 million in rainy day fund savings is contingent on the General Assembly placing a $2 billion bond package on the 2016 ballot. Details of the bond package will be worked out in a separate bill.

Berger also noted that the budget preserves funding for driver’s education programs in North Carolina high schools and teacher assistants in elementary schools, two items that had been hot topics of debate among budget writers.

“It increases the funding for K-12 public schools by $410 million, community colleges by $20 million, and for the UNC system alone by $99 million,” House Speaker Tim Moore, R-Cleveland, said.

Moore said that class size in the first grade would be reduced to a 1:16 ratio in the second year of the two-year-budget plan. Funds will be provided to enhance textbook and digital learning resources, he said.

The budget includes $225 million over two years to restructure the state’s Medicaid program. However, Moore said separate legislation would provide more details on Medicaid reform.

The Senate tentatively planned an initial vote on the budget for Tuesday. The House, which requires the budget to be posted for three legislative days before a vote, will hold its first vote Thursday.

The new fiscal year began on July 1. Lawmakers have twice adopted temporary measures to give the state spending authority. The most recent one expires Friday.

Senate Minority Leader Dan Blue, D-Wake, criticized the process leading to this week’s agreement and planned vote.

“This process has been an absolute disgrace to the taxpayers of this state,” Blue said. “Legislators and the public alike will have less than 24 hours to read and digest a final budget that is expected to be well over 500 pages, and will drastically affect the livelihood of the state over the coming two years.”

Blue continued. “With all negotiations taking place behind closed doors, one has to wonder what the budget writers are hoping to hide from the public,” he said. “Even without addressing the wrong priorities put forward in this budget, the process itself has been a sham since day one, and the people of this state deserve better.”

Josh Ellis, Gov. Pat McCrory’s communications director, said the McCrory administration thanked lawmakers for their work on the budget.

“The governor and his team will thoroughly review the proposal to ensure it is fiscally responsible and aligns with our state’s priorities in key areas that the governor has championed including job creation, education, health care, and transportation,” Ellis said.

“Hands down, the best thing about this budget compromise is the agreement to limit state General Fund spending to an increase of roughly 3 percent,” said Mitch Kokai, senior political analyst at the John Locke Foundation. “Despite the presence of hundreds of millions of dollars in unanticipated revenue and the desire among many members of the N.C. House to ramp up spending at a higher rate, cooler heads prevailed. Negotiators realized that the trajectory of state spending growth needed to be kept in check.”

The budget provides an additional $6.8 million this fiscal year and $14 million in 2016-17 for the fledgling Opportunity Scholarships Program, which allows children from lower economic families to receive vouchers to attend private schools. The money will allow about 1,700 more children to use vouchers this year and about 3,500 more next year.

It provides $38 million over two years to boost salaries of correctional officers and provides market-based pay raises to attract and retain state employees, two items sought by McCrory.

The budget establishes two new Cabinet departments within the executive branch, the Department of Information Technology, and the Department of Military and Veterans Affairs.

In addition, the budget transfers attractions, such as museums and state parks, to the Department of Cultural Resources.

Barry Smith (@Barry_Smith) is an associate editor of Carolina Journal.