‘The House and the Senate have reached an agreement on the budget’ declares Senate Leader Phil Berger
State Republican leaders are offering pay raises to teachers and state employees — but not as much as Democratic Gov. Roy Cooper wants. Lawmakers also aren’t including the Medicaid expansion that Cooper has called a priority.
Legislative budget writers revealed their $24 billion budget plan on Tuesday in preparation for adopting it this week to send to Cooper before a deadline of July 1, the start of the new fiscal year. Republicans have large enough majorities in the House and Senate to pass the budget but not to override a veto by Cooper unless they get support from some Democrats.
“I’m hopeful that when Gov. Cooper receives it from us he’ll reconsider his position and he will sign this budget,” House Speaker Tim Moore said during a news conference. “This is a budget that Republicans and Democrats and anything in between ought to be happy with because this is a budget that’s not about partisan politics.
“It’s a budget that’s best for North Carolina and I hope to see it become law.”
The budget was the result of a compromise between the different priorities in the Senate and House plans. For instance, the new budget doesn’t include the Senate’s funding cuts to a Greenville hospital. But it calls for moving state offices overseeing social services and health care programs out of Raleigh, as the Senate proposed.
Reaction to the plan’s raises was mixed, with teachers’ groups unhappy but a state employee group praising the increases.
“From what we’ve seen, this is a bad budget that has the wrong priorities,” Cooper spokesman Ford Porter said in a statement. Among other objections, he said it “spends more on corporate tax breaks instead of significantly higher teacher pay” and “fails to do anything to close the coverage gap that would make health care more accessible for working people.”
The budget documents can be found online at https://www.ncleg.gov/.
No Medicaid expansion
Cooper has frequently hinted that he might veto any budget proposal that doesn’t include Medicaid expansion — which he has previously said would create jobs in addition to providing health care coverage for thousands of uninsured North Carolinians.
But legislative leaders have resisted those calls, both in their initial budgets and the plan released Tuesday. Instead, the budget says “the General Assembly encourages the Governor to convene an extra session” to “consider access to health care across North Carolina.”
Senate leader Phil Berger said they’d be open to having a Medicaid expansion debate later this year after the budget talks are done, although he didn’t make any promises that it would pass.
“We can’t preordain the outcome of any specific policy,” he said Tuesday.
State employee raises
Budget writers are proposing a 2.5% average raise for most state employees in each of the next two years. The plan matches the Senate budget and is more than the 1% a year proposed by the House.
Some specific state agencies will also get extra money for raises, to help those agencies recruit and retain workers. Budget writers specifically highlighted the state’s prison system — which has long faced issues with understaffing —as one of the agencies that will be getting extra money.
State retirees would get a 0.5% boost, in the form of a one-time bonus instead of a raise.
“We are grateful that, for the first time in decades, the House and Senate prioritized state employee raises in the conference budget,” State Employees Association of North Carolina president Jimmy Davis said in a news release. “Thousands of SEANC members took grassroots action and contacted their legislators during this process.”
Budget writers say teachers would get an average raise of 3.9% over the next two years. The raises would start July 1.
In the Senate budget, the average teacher raise would have been 3.5% over two years. In the House, teachers would have gotten an average raise of 4.6%, but the pay scale wouldn’t change until Jan. 1.
It doesn’t include the House’s proposal to restore extra pay for teachers who have advanced degrees.
The compromise budget, lawmakers said, is focused on giving raises to highly experienced teachers after previous budgets focused more on raises for beginning teachers:
▪ Teachers with 16 to 20 years of experience would get a $500 raise both years, or 1% each year.
▪ Those with 21 to 24 years of experience would get a $1,500 raise this year followed by a $500 raise next year. That’s 3% this year and 1% next year.
▪ Teachers with 25 years or more experience would get a raise of $600 this year and $500 next year. That works out to 1.2% this year and 0.9% next year. They’d also get a $500 bonus check in each of the next two Octobers.
Teachers with less than 15 years of experience would get the automatic annual $1,000 raise they’d get in the state pay scale.
The budget proposes 1%-per-year raises for education support staff like custodians, instructional assistants and cafeteria workers.
“As a career educator, I understand the sacrifice and dedication that is necessary to succeed in the classroom,” Mark Jewell, president of the N.C. Association of Educators, said in a statement Tuesday. “I also understand that educators require more than mere platitudes when it comes to classroom support, student services, and their own compensation.
“Regrettably, this budget again shortchanges educators at all levels and at all career stages, ignores the critical needs of our retirees, and leaves our students and their families needlessly vulnerable.”
Paying for school construction
Legislative leaders have agreed on a plan that they say will provide billions of dollars in needed construction projects for K-12 schools, community colleges and universities without having to issue construction bonds.
The plan calls for committing $4.4 billion over the next 10 years for school construction projects. It favors the Senate plan to pay for school construction projects by setting aside money to funds such as the State Capital Infrastructure Fund.
Moore and several House GOP leaders, along with Cooper, had talked about holding a school construction bond referendum on the 2020 ballot. Moore had proposed a $1.9 billion bond.
Cooper called the plan in Tuesday’s agreement a “a slush fund that promises projects that may never be built rather than using a school bond at today’s historically low interest rates to help build new schools responsibly.”
Possible DHHS move from Raleigh
Lawmakers have kept the Senate’s proposal to move the headquarters for the state Department of Health and Human Services out of Raleigh.
The budget includes $244 million to build a new administrative facility in Granville County for DHHS employees currently working at the Dix Park location in Raleigh.
“It’s important for the more rural areas to reap the benefit of state jobs,” Berger said.
Republican leaders said it’s the same philosophy as their efforts to move the state Division of Motor Vehicles headquarters from Raleigh to Rocky Mount.
The DHHS move would lead to longer commutes for current employees, potentially causing some to quit their positions. But lawmakers said it’s important for state employees to work in rural areas too.
“We need to make sure that rural North Carolina is not left behind,” Moore said.
Budget writers have dropped wording in the Senate budget that could have had a disastrous impact on a Greenville hospital.
The Senate budget had a $35 million cut to Medicaid reimbursements for Vidant Medical Center in Greenville and removed its status as a teaching hospital, the N&O previously reported. Vidant Medical Center had recently sought to remove the UNC Board of Governors’ ability to appoint hospital trustees.
The proposed budget would attempt to alleviate the squabble between the UNC system and Vidant Medical Center by providing an “enticement” for Vidant giving some control back to UNC, said state Sen. Jim Perry, a Lenoir County Republican.
The budget would restore Medicaid reimbursements to Vidant Medical Center and help fund a new East Carolina University medical school building. But to receive that money Vidant has to return the UNC Board of Governors’ ability to appoint members to the hospital board of trustees.
Rural broadband access
Republican Rep. Jason Saine of Lincoln County, a top House budget writer, said the budget has $15 million to help extend broadband internet access to remote rural corners of the state — “and more to come,” he said.
“We want to make sure we always stay at the cutting edge.”
Free school lunches
Students who currently qualify for reduced-price lunches at school could qualify for free lunches next year, due to an additional $3 million the budget would put into the school lunch program.
The budget includes $91 million for school safety spending, most of which would go to hire new student resource officers and mental health professionals. School safety has become an even more major concern following the 2018 mass school shooting at Marjory Stoneman Douglas High School in Parkland, Florida.
“We also continue to invest in school safety,” Moore said. “That’s a concern every parent in this state has.”
Rainy day fund
Over the next two years the budget would add more than $700 million to the state’s “rainy day fund” savings. Republican Sen. Harry Brown of Onslow County said that should bring the savings back to nearly $2 billion, which was what the state had in reserve before hurricane damages in recent years.