RALEIGH — A memo from State Budget Director Art Pope to state department heads is evidence that Gov. Pat McCrory may seek pay raises for state workers in his 2014-15 budget, but it also suggests that departmental budgets may face further cuts to cover the cost. The Dec. 12 memo calls on state agency and department heads to propose cuts of at least 2 percent from what the General Assembly allocated for next year in the current two-year budget.
“These net savings in appropriations, along with additional availability, may be applied toward compensation increases for teachers and state employees, while fully funding the state’s overall obligations and future priorities,” Pope wrote in the memo.
In a statement, McCrory’s office said it is “working tirelessly and looking at options to give our hardworking teachers a raise.” “This is just one option that is on the table,” the office said in an email. Asked about other options, Ryan Tronovich, a McCrory spokesman, said the office would make announcements when appropriate.
The State Employees Association of North Carolina has made getting 3 percent pay raises for employees and retirees its top priority for the 2014 short session. State employees have received one pay raise since 2008, a 1.2 percent boost in 2012. Toni Davis, a SEANC spokeswoman, said the association believes there is plenty of room for cuts in the state’s roughly $20 billion budget. “We believe there are billions of dollars in savings, and we’re happy to work with lawmakers to help point them out,” she said.
The budget office has started preparing McCrory’s budget proposal for the 2014-15 fiscal year, which begins July 1. Lawmakers will debate the spending plan when they return to Raleigh for the short session in May. Pope wrote in the memo that the sum of each agency’s proposed cut, plus any requests for additional funding, should equal a net savings of at least 2 percent for the state. In other words, if an agency wants money for a new initiative, it’ll have to cut more than 2 percent.
The suggested agency cuts, Pope wrote, should not be across-the-board reductions. Rather, agencies should consider eliminating or consolidating programs, offices and services; reducing layers of management and administration; and using agency receipts instead of relying on state appropriations.
The memo notes that the budget requests are the starting point for the governor’s budget recommendations and may or may not be included in McCrory’s spending plan submitted to the General Assembly.
State Rep. Nelson Dollar, a Wake County Republican and the House senior budget chairman, said he believed some departments would be able to find more savings than others. Cabinet secretaries, he said, have been in their positions for more than a year and should be getting a better grasp on where they can save money. “The upside of what’s being asked is that ideally a large share of this would actually come back to the agencies in the form of compensation for state employees,” Dollar said.
Amy Auth, a spokeswoman for Senate leader Phil Berger, an Eden Republican, said the Senate welcomes any effort to identify savings in state government and looks forward to reviewing details of the governor’s budget when it is released this spring.