NC Senate presents budget proposal highlights
The North Carolina Senate’s proposed budget is out, and its proposed raises for teachers and other state employees are different from what the House proposed in its own budget.
Senate Republicans released their spending plan Tuesday.
▪ The average teacher raise, excluding bonuses, would be 3.5 percent over two years, according to Republican leaders.
Senate Majority Leader Harry Brown said teachers who have worked for 15 to 24 years would receive a $500 bonus and teachers with 25 years or more experience would receive a $1,000 bonus. The bonuses are annual. Brown said the budget also includes $15 million for more principal pay. A new incentive structure would give salary supplements to principals at low performing schools — $30,000 for three years if the schools are in the lowest 5 percent in performance.
In House Republicans’ budget, teachers would get average raises of 4.6 percent, but the teacher pay scale also wouldn’t change until Jan. 1, instead of the beginning of the school year, as in the Senate budget.
Also, unlike the House plan, the Senate budget would not restore a program eliminated in 2013 that provides extra pay for teachers who have advanced degrees like master’s degrees and doctorates.
The Senate would provide school support staff such as custodians, teacher assistants and cafeteria workers with a 1 percent raise. The House provided them a 1 percent raise or $500, whichever was greater.
▪ Correctional officers would see raises of 5 percent over two years, plus at least $7,500 in salary supplements for facilities with the highest employee vacancy rates.
▪ Most full-time state employees would receive a 5 percent raise over two years.
In the House budget, aside from teachers and principals, most state employees would receive just a 1 percent raise, which like the teacher raises would kick in Jan. 1.
“I think the House would be wise to follow the Senate’s lead [on raises],” said Robert Broome, executive director of the State Employees Association of North Carolina.
“For far too often state employees have not been made a priority in state budgets. They were treated as an afterthought in the process,” Broome said. “It’s not possible to make up for decades of inequity in one budget cycle, but you have to start somewhere.” He called it another good step forward after the General Assembly made sure last year that most state employees made at least $15 an hour.
While the Senate budget includes raises for state employees, it does not include cost of living adjustments, or COLAs, for state retirees.
“We’ve made a conscious decision because of pressures we’ve got on the retirement system itself that ... making an increase there, we just didn’t have the capacity to do that,” Senate leader Phil Berger said Tuesday.
Sen. Joyce Waddell, a Mecklenburg County Democrat, is a retired state employee. She said last week that she couldn’t live on an average pension of $21,000.
“The older you get, the more health problems you’re likely to have, and [prescriptions] are expensive,” Waddell said then. “We shouldn’t be in this situation. We were told we’d be taken care of, and here we are not. Give us a decent cost of living adjustment,” she said.
From the House, retirees would get a one-time payment of 1 percent of their annual retirement allowance. And it wouldn’t come until the second year, between July and November 2020.
Broome said he wishes COLA money was in the budget, but also thinks the state Treasurer’s office deserves some of the blame, not just the legislature. He said he can’t remember the last time the Treasurer’s office was able to fund a COLA raise on its own, due to what he called decades of mismanagement, but he added that he has faith in Dale Folwell, a Republican who has been treasurer since 2017, and thinks he is taking that office in the right direction.
The North Carolina Retired Governmental Employees’ Association called the lack of a COLA for more than 270,000 retired teachers and government employees a “hurtful choice” by Senate leadership.
“These men and women do not deserve to be ignored by the leadership charged to maintain their pension value. Pension values continue to decline as inflation increases, denying retirees a deserved cost of living adjustment will have long term negative consequences on individual pensioners as well as the state economy,” the association wrote.
Among other budget details:
▪ $1.3 billion in additional spending for public education over two years.
▪ Funding for 100 new school psychologists.
▪ $4.8 billion across three accounts for school construction and maintenance over 10 years, starting immediately.
Public safety and justice
▪ Funding to eliminate the backlog in processing rape kits within two years.
▪ Funding to implement “Raise the Age,” which increases from 16 to 18 the age at which teenagers are treated as adults for nonviolent crimes.
Taxes and savings
▪ Increases the standard tax deduction. Raises the standard deduction from $20,000 to $21,000 for married couples filing jointly. That change would mean that couples who don’t itemize their taxes would save an additional $52.50 per year.
▪ Decreases the franchise tax that applies to businesses and extends tax cuts for NASCAR teams and airlines, from 2020 to 2024.
▪ $1.1 billion for the state’s rainy day fund over two years. Berger’s release said state economists estimate the savings fund needs at least $2.6 billion to withstand a recession.
▪ $2.5 million to construct a monument on the State Capitol grounds in downtown Raleigh honoring the contributions of African Americans, as well as $1.5 million toward the Freedom Park, also downtown.
▪ $15 million each year for GREAT Program rural broadband grants.
▪ $53 million each of the next two years for airport improvements.
▪ Funding to “fight the ongoing opioid epidemic.”
No Medicaid expansion
The Senate budget does not include an expansion of Medicaid, though it does allocate funds for 1,000 people on the Intellectual/Developmental Disability Medicaid Program wait list.
Democratic Gov. Roy Cooper has previously said Medicaid expansion is his biggest priority this year. But the House did not include that in its version of the budget, either.
Earlier this month, House Democratic leader Rep. Darren Jackson said Cooper will veto any budget proposal that doesn’t have Medicaid expansion, The News & Observer reported. But Cooper’s office said it was still too soon to say, since budget debates are still going on.
Berger’s office said Tuesday that while the Senate won’t propose Medicaid expansion in the upcoming budget, senators do plan to spend roughly $140 million over the next two years to make up for federal cuts in spending on health care programs for poor children. The child health care program is called CHIP at the national level and NC Health Choice in North Carolina. It provides medical care for children from families who can’t afford private insurance but make too much to qualify for Medicaid. In North Carolina, about 250,000 children are affected by the federal cuts, lawmakers said in March.
Berger said Tuesday that the uncertainty surrounding federal funding is part of the reason why Republicans haven’t wanted to expand Medicaid in North Carolina. He said taking on an obligation to cover additional people does not make fiscal sense.
In addition to uncertainty around federal funding, Berger also said he opposes Medicaid expansion because, he said, the bulk of those eligible for Medicaid expansion “are healthy 18 to 50 year old individuals, that once, if you were to cover them with Medicaid, if they did get a job and began making a certain amount of money they would no longer be eligible for the program.” Berger said that it “disincentivizes folks to go to work.”
Cooper’s office issued a statement about the Senate budget on Tuesday:
“This budget leaves out Medicaid expansion that would close the health care coverage gap and it shortchanges public schools in exchange for more corporate tax cuts. The Governor hopes to continue working with the House and Senate on a budget that does more to help hard working North Carolinians,” Cooper’s spokesman Ford Porter said.