Raleigh, N.C. — State House leaders say the $20.6 billion spending plan unveiled late Sunday night is "fiscally responsible and economically sustainable."
"We have crafted a budget that balances state spending with our income, sets priorities and does not raise taxes," said senior budget chairman Rep. Nelson Dollar, R-Wake, adding that the proposal increases state spending by only about 1.9 percent over 2012.
"The House's budget proposal is realistic, it is reasonable and it is responsible," he said, "and it places North Carolina's house on a sound foundation for the future."
According to budget-writers, the House plan for 2013-14 spends $12 million less than the Senate proposal and $188 million less than recommended by Gov. Pat McCrory.
It adds funding for 5,000 more pre-kindergarten slots and restores money for the state's Teaching Fellows program. It provides short-term funding to keep group home residents in their placement while a long-term fix is tailored and would keep the state's three in-patient drug and alcohol treatment centers open. It also adds money for additional magistrates and probation officers.
State employees and teachers would receive five days of non-expiring leave. The House plan sets aside $160 million in the second year for "salary adjustments," but it's unclear whether that would be broad-based or tied to new performance-pay initiatives.
Dana Cope, executive director of the State Employees Association of North Carolina, said the House plan gives his members more than the Senate budget, but he's leaning more toward an immediate 1 percent pay raise proposed by McCrory.
"While the vacation days are good and appreciated, quite frankly, they won't put food on the table," Cope said.
Likewise, North Carolina Association of Educators President Rodney Ellis is seeking more money for public school teachers in the final budget.
"When I talk to educators, their primary concern right now is that we rank 48th in teacher salaries," Ellis said.
The House plan tries to hold the line on class sizes, cuts fewer teacher assistants than the Senate budget and includes salary supplements for teachers with advanced degrees.
Dollar said the budget covers the cost of the House's tax reform plan. Asked about the stark differences between House and Senate tax reform price tags, he said, "We do have space in the budget to harmonize."
House Speaker Thom Tillis said he's optimistic that the process can be completed by the end of June.
"I think the Senate has some great ideas. The question is the timing and when it fits into the process," he said. "It's a continuous process."
Tillis added that an agreement on tax reform would have to precede a budget deal, since the former will determines the amount of available revenue. He said the two are being negotiated separately, but that they'll be closely tied together.
Charter schools and eugenics
House budget subcommittee chairs were on hand Monday to field questions about some of the special provisions in the House's proposal.
One likely sticking point for later negotiations is the House's inclusion of funds to reimburse living victims of the state's eugenics program. Compensation had strong bipartisan support in the House in 2011 and 2012, but Senate Republicans refused to take it up.
Asked about the odds that eugenics compensation will appear in the final budget deal, Dollar would only say, "We are going to do our best."
Rep. Craig Horn, R-Union, was asked about a half-million dollar line item – essentially a no-bid contract – for a dollar-for-dollar matching grant for pro-charter nonprofit Parents for Educational Freedom in North Carolina to help organize efforts to start charter schools in rural areas.
The provision would put PEFNC in charge of administering grants of up to $100,000, half of it taxpayer-funded, for planning for rural charters.
House lawmakers are also seeking to set up a state charter school board within the Department of Public Instruction. That Board might seem to be a logical choice to perform the advocacy work the budget would pay PEFNC to do.
But Horn said the state charter board wouldn't likely get involved in rural outreach "till there is reason to believe that it would make sense to put a charter school in the area."
The budget also includes $50 million over the next two years for "Opportunity Scholarships," a House-backed plan to provide grants to lower-income families to help pay for private K-12 education.
"It's a relatively small piece," said Dollar. "It's almost the size of a pilot program."
The spending plan will be in the House Appropriations Committee Tuesday. That committee is expected to spend most of the day debating amendments to the bill. Its first House floor vote is scheduled for Wednesday.