Raleigh, N.C. — The spending plan state Senate budget writers rolled out Monday doesn't replace $258 million in federal EduJobs money that school systems will lose this year. Without that money, school superintendents have warned they will likely have to cut teachers, teacher assistants and other school workers.

That puts the Senate at odds with both Gov. Beverly Perdue and the budget passed by House lawmakers earlier this year. 

"We took a very minimalist approach," said Sen. Richard Stevens, R-Wake, one of the Senate appropriations committee co-chairmen who constructed the budget. 

Senate leaders said they were more cautious than their House counterparts, who used savings and other "one-time" money to offset the EduJobs cuts. Doing so, they said, would have merely delayed pressing decisions.

Replacing the federal funds, which were handed down as part of the stimulus, has been a key request of school superintendents across the state.

"We are going to see more teachers leaving, and you're going to have school systems that don't have the money to replace these teachers. So, you're going to have class size that goes up," said Brian Lewis, government relations manager for the North Carolina Association of Educators.

But Senate President Pro Tem Phil Berger said it was not the state's job to back-fill for federal spending. Berger, R-Rockingham, said many educators have over-estimated the effect of EduJobs, saying that much of that money went to positions outside the classroom.

"Many of these are the same people who were talking about tens of thousands of layoffs as a result of last year's budget, which just didn't happen," he said. "I'm not sure the classroom impact will be as great as some have said."

The Senate did eliminate $74 million in state cuts beyond the federal EduJobs money that were due to go into effect this year. 

Other early highlights from the Senate budget bill: 

• It does not appear to include a reserve fund to compensate the survivors of North Carolina's state-sponsored eugenics program, which forcibly sterilized people for decades. That measure has been a key House priority.
• Senators did include $47.4 million needed for Berger's Excellence in Public Schools Act. Under that bill, most third-graders would not be able to move on unless they could pass standardized reading tests.
• It anticipates the conversion of of local mental health agencies to managed care organizations won't save as much money as first projected. This conversion has been fraught with difficulty, and advocates for the mentally ill say most locally run mental health agencies aren't ready for the switch. The House budget anticipated going forward with this change and saving $8.5 million in the coming year. Senate budget writers anticipate spending $11 million due to the delay in converting. 

"We want to see the savings first and not count on them," Sen. Pete Bunstetter, R-Forsyth, said of the mental health provision. According to budget documents, the extra money will allow for "delayed state-wide expansion" of the program.

In general, the Senate budget is more austere, backing away from many of the items that the House budget would have given to agencies. For example, House budget would have allowed the state crime lab in the Triad to add positions to conduct DNA analysis. The Senate budget doesn't provide those funds.

Likewise the Senate doesn't include the money that House budget writers earmarked for a new tax credit for corporations and wealthy individuals who donate to scholarship programs that allow students from poor families to attend private schools. Nor does the Senate proposal include funding for infant mortality prevention programs – such as a program based at East Carolina University that serves low-income women in 29 eastern counties – that the House had included in its version of the budget bill.

The Senate budget would provide $230 million to cover the state's increasing Medicaid shortfall, and about $84 million is set aside for public schools that could be used for either raises or retaining teachers who had been paid by federal EduJobs funding.

Lewis said virtually no school system would give a raise under that plan.  

"It would be totally imprudent for superintendents to give out raises," he said.

"What looks like a pay raise for teachers is in fact no pay raise at all," he added. "We got on the phone with the (North Carolina) School Boards Association this morning. We were told no raises were going to happen for teachers."

Perdue said in a written statement that she was unhappy with the Senate's effort.

“The Senate budget means more pink slips for teachers and classroom cuts that would threaten our children’s future,” she said. “It doesn’t have to be this way. I have outlined two alternatives to fund our schools, but Senate Republicans have rejected both. This budget is simply not good enough for our children or the economic future of our state. I call on the Senate to do better.”

Rank-and-file state employees who aren't teachers are more pleased with the Senate version of the budget, which would put more money into the state retirement system. Senate budget writers also set aside money to give a 1.2 percent salary increases public employees. The House had provided a one-time $250 bonus.

"After promising these raises in last year’s budget, the Senate has chosen to keep their word," Dana Cope, executive director of the State Employees Association of North Carolina, said in a letter to his members. "A one-time bonus is no substitute for a base pay raise, which would be a greater benefit for employees in the long-term for compensation and retirement benefits."

Cope encouraged state workers to lobby lawmakers for a budget that would include both the pay raises advocated by the Senate and the five extra days off included in the House spending plan.

House and Senate budget writers do share some common ground. Both budgets would cap the state's gas tax at 37.5 cents per gallon, for example. 

The Senate is expected to pass its version of the budget this week. The House and Senate would then have to construct a compromise plan to send to Perdue.

"I am confident we'll be able to work things out with the House," Berger said. "As far as the governor is concerned, I'm hopeful that she would sign the budget, as I've been hopeful she would sign a number of other things that we passed."