A memo from State Budget Director Art Pope to department heads is additional evidence that state leaders may increase pay for state workers in the 2014-15 budget, but it also suggests that departmental budgets might be cut to cover the cost.
The Dec. 12 memo from the state budget office calls on state agency and department heads to propose cuts of at least 2 percent from each agency’s budget for 2014-15. The sum of each agency’s reduction recommendation plus expansion requests should equal a net savings of at least 2 percent, according to the memo.
“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, Gov. Pat McCrory’s office said it is “working tirelessly and looking at options to give our hard working teachers a raise.” “This is just one option that is on the table,” the office said. Asked about other options, Ryan Tronovich, a McCrory spokesman, said the office would make announcements when appropriate.
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The memo says the budget office has started preparing McCrory’s supplemental budget for the 2014-15 fiscal year, which begins July 1. Lawmakers will debate the spending plan when they return to Raleigh in May for the short session.
“Governor McCrory has established his agenda to focus on three primary budget priorities: Economy, Education and Efficiency of services,” Pope wrote in the memo.
The suggested agency reductions, Pope wrote, should not be across-the-board reductions. Rather, agencies should consider the elimination of underperforming programs; consolidation of programs, offices and services; reductions in operating dollars from service efficiencies or reduced layers of management; and using agency receipts to offset 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, R-Rockingham, said the Senate welcomes any effort to identify savings in state government and looks forward to reviewing details of the governor’s budget.