State Politics

Gov. Pat McCrory’s budget includes some raises, university cuts

Governor Pat McCrory unveils the budget at the Joint Force Headquarters Media Briefing Room in Raleigh Thursday.
Governor Pat McCrory unveils the budget at the Joint Force Headquarters Media Briefing Room in Raleigh Thursday. ehyman@newsobserver.com

Gov. Pat McCrory on Thursday began outlining his proposed state budget for the next fiscal year – a plan the governor says is the result of making “tough choices” to produce a “thoughtful” proposal.

The budget includes pay raises for starting teachers, corrections officers and state troopers, and it forces some cuts on the state’s university system. Other state employees would not see a pay increase.

Tax rates would remain unchanged in the $21.52 billion general fund spending plan.

“We have had to make tough choices to arrive at this comprehensive, thoughtful budget proposal, and I’m proud of what we will accomplish through it,” McCrory said in advance of the budget’s release. “The issues our state faces each and every day are thoroughly addressed in this budget, with the priorities of our citizens accurately reflected.”

This story is developing and will be updated.

Here are some highlights.

Raising pay for beginning teachers

McCrory’s plan would raise starting pay for teachers to $35,000 – a priority legislative leaders have said they share. McCrory wants $15 million over two years to offer raises to “high-performing teachers,” but not all veteran educators would see bigger paychecks.

“Once you have everybody to a minimum, the additional resources beyond that should be focused on the teachers that are most effective and are making the most difference in the classroom,” budget director Lee Roberts said.

Overall, education funding would be increased by $235 million, or 2.8 percent, from the current year. That includes funding to address enrollment growth, which will require 1,400 additional teachers. The budget also includes $70 million over two years for textbooks and other instructional supplies.

Raises for some – not all – state employees

No pay raises are included for all state employees. But McCrory would create a $82 million “salary exception fund,” which would allow the state to set higher salaries for employees “in high-demand fields, such as engineering, accounting and information technology.”

McCrory also wants raises for the state’s 10,000 corrections officers as well as Highway Patrol troopers. Prison officers would see a new pay scale that replaces one updated in the 1980s. State troopers would get their scheduled 5 percent “step increase.”

“What we should do in a situation of limited availability is use the money where it can make the most difference,” Roberts said. “An across-the-board pay raise is not the most effective way of doing that.”

Funding for jobs incentives

The budget proposal includes $99 million to implement McCrory’s N.C. Competes job recruitment program. The plan would double the money available in what is now known as the Job Development Investment Grant or JDIG. The fund, used to lure major employers to the state, is largely out of money but would get a $22.5 million infusion if legislators approve. Other provisions of the plan are narrowly tailored to attract an auto manufacturing facility. McCrory also wants to put $5 million in the One North Carolina Small Business Program, which offers early-stage funding to technology start-ups. The budget says the creation of a public-private partnership to oversee recruitment has saved the state 5 percent over the previous year’s budget for the program.

A 1.2 percent cut for higher education

The budget proposal asks the UNC system to “identify savings” equal to 1.2 percent of its overall budget. McCrory’s budget message argues the cuts can be made “without any impact on students.” The budget would also ban universities from spending more than $1 million in state money on private fundraising. That mandate would affect 12 universities and cut $18 million.

McCrory says his departments have taken 2 percent cuts and “no one should be exempt from that.” He said the budget plan gives university leaders the flexibility to decide where to cut.

McCrory also wants to fund initiatives to help develop business ventures from university research. He’s said the state’s universities don’t do enough to bring the fruits of their research to the market. The budget includes $25 million toward programs to address that concern.

Meanwhile, community colleges would see a tuition increase. Classes would cost an additional $4 per credit hour for in-state students, to $76. That’s a 5.5 percent hike.

Borrowing for transportation needs

The budget includes a transportation bond of $1.2 billion to $1.4 billion to speed up projects in McCrory’s 25-year transportation plan. In the coming budget year, the state would spend $135 million on what’s deemed “critical infrastructure” and $51 million for road preservation and improvements.

New healthcare funding

The budget would add $82 million in new funding for mental health and substance abuse services. It would also add $287 million to keep up with growth in Medicaid enrollment. And it would set aside $175 million to a Medicaid “risk reserve” that would address any cost overruns in the program.

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