Gov. McCrory plans for potential NC budget impasse

06/23/2014 4:42 PM

02/15/2015 11:29 AM

Gov. Pat McCrory is making plans for the big "what if" - what happens if the legislature doesn't bridge several yawning gaps among the two chambers and his office in time to agree on a budget by the start of the new fiscal year on July 1.

McCrory called reporters to his office on Monday afternoon to let them know he has told Budget Director Art Pope to issue a directive letting state agencies know how they should proceed if the current two-year budget isn’t amended in the next eight days – which is pretty much the whole reason the legislature is back in town for the short session.

Because it’s a two-year budget, the state can continue to operate on the spending plan that has already been enacted without fear of a looming shutdown. But all the teeth-gnashing that has been going on over cuts and realignments since May would be for naught.

McCrory said if the amended budget isn’t in place, spending for teachers assistants would not be cut below what was spent on them this year. He said those on Medicaid, the blind, disabled and Alzheimer’s patients also would not be affected.

But pay raises for teachers and state employees wouldn’t happen, he said. The governor added that he was confident the budget differences would be resolved and would include the raises, as promised. He said he has been talking with House and Senate leaders over the past week.

"I just want to urge the General Assembly to continue to add a sense of urgency to these budget negotiations," McCrory said.

The governor said stark differences in Medicaid cuts, Medicaid cost forecasts and on education spending remain the major hurdles. He said he is confident there will be agreement on Medicaid and the wobbly lottery projections for education funding. He added that he is pushing hard to spare teacher assistants, which the Senate budget would eliminate.

Amy Auth, deputy chief of staff for Senate Leader Phil Berger, issued a statement in response:

“The legislature must receive the real numbers on Medicaid and the lottery we requested from DHHS (Department of Health and Human Services) and OSBM (office of State Budget and Management) to move forward on the budget,” she said.

Pope’s directive informs state agencies that, as of July 1, their monthly allotments will be based on the lower amount of the budget appropriations proposed in the House or Senate budgets for the entire agency, except for teacher assistants. Further, vacancies subject to the Senate’s proposed budget will not be filled, employees subject to losing their jobs in the Senate bill will receive 30-day written notice, and there will be no automatic raises or bonuses for teachers and other state employees.

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