Democrats wrap up negotiations on state budget

Democratic leaders for the two sides reached the agreement Saturday afternoon.

The plan would repeal a waiver that treats out-of-state students on athletic scholarships like in-state students. It reduced the costs athletic booster clubs paid for the scholarships at cost of more than $9 million to taxpayers.

House Speaker Joe Hackney said given the state's tough financial situation, some cuts were necessary.

“It’s much more difficult than past years simply because of the depth of the cuts that we're doing now. It’s hard. There are no good choices left,” Hackney said.

North Carolina and nearly 30 other states had counted on a combined $24 billion in Medicaid money to balance their budgets, but more federal lawmakers have become nervous about approving more U.S. government spending.

Budget negotiators discussed ways to close that hole if the state's $525 million in Medicaid money doesn't come through. Protecting teacher jobs was among the top priorities.

"Public education did not get cut that much," Hackney said. "We're trying to preserve teaching positions to the maximum extent possible."

"There were a number of things we want to make sure in education that we're covering all the public schools, community colleges and universities in appropriate manner to offer as many opportunities as we can for our children to get an education," Senate budget co-chairwoman Linda Garrou said.

Another goal was supporting the state's growing community colleges. This spring, Wake Technical Community College held its largest graduation in the school's history with a 28 percent increase in graduates over the year before.

"We have over 30,000 students coming into the community colleges, so we had to appropriate money for them," Garrou said. "We're pleased that we could do that."

Without federal Medicaid funds, the budget would direct state officials to take money from the rainy day reserve fund and reduce the state retirement system contribution.

Like both the competing House and Senate budget plans, the final proposal will contain no additional broad-based tax increase and provides no pay raises for teachers and state employees as lawmakers closed what Democrats called an $800 million budget gap. That hole would be higher without the extra Medicaid funds.

The plan is expected to be voted upon by the House and Senate on Tuesday and Wednesday, then presented to Democratic Gov. Beverly Perdue for her signature before the fiscal year begins Thursday.