Durham, N.C. — Gov. Roy Cooper rolled out his first state spending plan Wednesday, saying his $23.5 billion proposal invests in education, infrastructure and state workers to set the stage for North Carolina's future growth.
"This is a fiscally responsible budget with investment in our future without raising taxes, without raising fees, without cutting services and without dipping into special funds," Cooper said at a news conference at Durham Technical Community College.
The size of the budget – spending is 5.1 percent greater than the the 2016-17 budget – almost immediately met opposition from Republican legislative leaders. They have consistently pushed for limiting growth in the budget, with the current budget only 2.8 percent larger than 2015-16.
"Gov. Cooper is clearly growing nostalgic for the Easley-Perdue days of runaway spending, and his reckless $1 billion spending spree would surely return us to the days of high taxes and multi-billion dollar deficits," Senate President Pro Tem Phil Berger said in a statement, referring to former Democratic Govs. Mike Easley and Bev Perdue.
The state is expected to finish fiscal 2016-17 with a $522 million surplus, but Cooper's budget increases state spending by more than twice that amount.
"We believe a more prudent approach is investing generously in public education and other priorities while still saving for a rainy day and returning hard-earned tax dollars to our taxpayers," said Berger, R-Rockingham.
Recent budgets crafted by lawmakers have included income tax cuts for businesses and individuals and expansions of the state sales tax. Cooper said he wants to focus more on meeting state needs, which he said would boost the economy and, in turn, put more money in people's pockets.
"The money is available," Cooper said when asked about the size of the budget. "This is the kind of budget you can have if you make education and people the priority."
Senate Majority Leader Harry Brown, who will craft his chamber's budget proposal and get it to the floor by mid-May, said Cooper has some good ideas but adds the governor wants to spend too much.
"That's what got us in trouble the first time," said Brown, R-Onslow. "If we don't control the spending, then we'll be right back where we are having to face some deficits and just deal with that, and I don't think any of us want to do that."
Republicans hold veto-proof majorities in both the Senate and the House and can pass a state budget without Cooper's input, but the governor said he hopes to work with lawmakers to craft a spending plan that reflects at least some of his priorities.
"I hope that we can work this out in a way that there's a budget that I can sign," he said. "I know I won't like everything in the budget, but I hope that we can work together with moderate Republicans and others to push us more toward the right kind of investment."
Education priorities dominate budget talk
Spending more on education would produce the biggest impact on state growth, Cooper said, so he provided extra money at every level from pre-kindergarten through the University of North Carolina system.
He previously announced plans for 5 percent raises for teachers in each of the next two years as part of a plan to raise North Carolina's average teacher salary to the national average within five years. His budget also includes 6.5 percent raises for principals and other school administrators and $29 million for school support staff that districts would be able to spend as they see fit.
Cooper also called for adding 4,700 slots over two years to North Carolina Pre-K to eliminate the waiting lists of 4-year-olds whose parents want to get them into the program. His budget would also restore the state's child care tax credit in 2018.
For higher education, the budget includes a new lottery-funded scholarship for community college students to help pay for tuition and fees once they have exhausted other sources of financial aid. Another scholarship program is targeted at providing up to $10,000 in tuition and fees to UNC students who agree to teach in public schools.
"We are catching up with investments in education all the way from birth through college," Cooper said. "It's time to catch up."
The budget plan does phase out the Opportunity Scholarship school voucher program, he said, because "I believe in investing in public schools." About 6,000 students now get the vouchers to help pay for schooling at private or religious schools, and Republican lawmakers have been expanding the program every year.
Cooper also includes an expanded Medicaid program in the budget, although state law precludes him from doing so without legislative approval. Under his plan, hospitals would pick up the costs of the expansion not covered by the federal government.
"It's a net gain for them," he said, noting an expanded Medicaid program would reimburse hospitals for indigent care – costs they traditionally have absorbed.
Other highlights of the budget include the following:
- Raises for state employees of 2 percent or $800, whichever is greater, plus a one-time $500 bonus.
- A 1.5 percent cost-of-living increase for state retirees
- $115 million for Hurricane Matthew recovery
- $20 million to restore the film production tax credit, which was phased out at the end of 2014
- $351 million in special financing bonds for state building renovations, half of which would be in the UNC system
- $20 million for rural broadband access
- $12.7 million in mental health funding to fight opioid addiction
- $233 million over two years for road construction and another $185 million for maintenance (Most road building is funded by state gas taxes and not through the budget.)
- $10 million for NC Invents, a program to help universities pitch technologies to investors for faster commercialization
- $25 million to expand affordable housing statewide