RALEIGH, N.C. — House Speaker Thom Tillis and Senate President Pro Temp Phil Berger outlined the $20.2 billion budget deal that legislative leaders inked late Tuesday during a news conference Wednesday morning.
Lawmakers haven't released copies of the budget to the public, but Berger and Tillis said that it included a 1.2 percent raise for state employees and public school teachers.
The new budget plan will take effect July 1 if it becomes law.
Republicans control both the House and Senate, but the two chambers created very different budget proposals. The compromise plan represents a merger of those two proposals.
Both Tillis and Berger said they hoped Gov. Beverly Perdue, a Democrat, would sign off on the plan rather than veto it. But Perdue has insisted for months that a tax increase was needed to augment education spending, something Republicans were unwilling to do.
Two high-profile items sought by House leaders were not included: funding for eugenics victims and language creating a tax credit for companies that fund private school tuition programs for low-income students.
"There was no ability to develop consensus on one particular path forward," Berger said of the eugenics bill.
While the House had passed a package that would give $50,000 to each victim of North Carolina's state-sponsored sterilization program from the early and mid-20th century, Senators balked.
Tillis characterized the lack of eugenics funding as "a personal failure" but said the Senate simply wouldn't budge on the issue.
Rep. Earline Parmon, D-Forsyth, said not including payment in the final budget is a betrayal.
"This year, we said that we would do something, that we would pass this compensation bill. We lied to the people of North Carolina who were victimized by us," Parmon said.
The Justice for Sterilization Victims Foundation, which has verified 146 and 15 deceased victims of the eugenics program in 57 counties statewide, said it immediately suspended requests to verify other victims. Foundation executive director Charmaine Fuller Cooper said the panel's funding ends on June 30 since the budget includes no new money for it.
As for the scholarship program, Tillis said the issue was still alive and might be handled in a separate bill.
The Senate is expected to vote on the budget Thursday. A House vote will be scheduled for Friday unless all the members of the chamber agree to waive a House rule to allow for a Thursday vote.
Specific items in the budget as detailed by Berger, Tillis and other budget writers include:
- A 1.2 percent raise for teachers and state workers. The Senate version of the budget would have allowed schools to use money for raises to offset other cuts to education funding. The compromise plan, Berger said, adjusts the salary schedule. Retirees in the state pension plan are also slated for a cost-of-living increase.
- A $251 million boost to education funding. This money helps roll back "flexibility cuts" to schools, money that public school systems have to hand back to the state government every year. The $251 million roughly compensates for the loss of federal EduJobs money that expires this summer. However, schools will still see roughly $82 million less in overall state and federal funding.
Importantly, the new education money is "recurring" money that will be available through tax funding in future years. House leaders had used one-time savings to back-fill education funding. That would have created a hole that next year's budget would have to fill, and Senators refused to use one-time money to fill recurring expenses.
- Major pieces of an education reform plan put forward by Berger. Students who do not pass reading tests by the end of third grade could not move on to fourth grade. The state will also create a new A through F grading system for public schools. It also creates a merit pay system for public school teachers.
- A cap on the state gas tax. Both the House and Senate budget would limit the gas tax to 37.5 cents per gallon for the next year.
- About $2.7 million for smoking cessation programs. That is far short of the $17.3 million smoking prevention advocates were requesting.
- $250,000 to study how to regulate natural gas drilling in the state. Lawmakers are about to send Perdue a bill that would pave the way to legalize a drilling process known as hydraulic fracturing, or "fracking," in North Carolina.
- Flexibility for the Department of Public Safety to hire parole officers. According to Sen. Harry Brown, R-Onslow, the budget doesn't give the department extra funding but does allow it to shift money from empty positions into new probation and parole positions. That shift is important, because last year's Justice Reinvestment Act emphasized so-called community corrections as a way to both save money and help offenders reintegrate into society.
- Tolls on coastal ferries. The Cherry Point-Minnesott run was exempted from this. Ferries to Ocracoke and Hatteras islands were exempted from fee increases as part of last year's budget. The plan to increase ferry tolls and toll more routes has sparked opposition from coastal communities and led to a showdown between the legislature and Perdue. In this budget, lawmakers basically return to plans to raise revenue on ferry routes.
- A $100 million reserve for unexpected shortfalls in Medicaid. The budget also boosts the basic Medicaid budget by $212 million to adjust for cost overruns seen this year that are likely to continue. The budget also calls for a full audit of the Medicaid program, said Sen. Pete Brunstetter, R-Forsyth.
Representatives of teachers and state workers gave the plan tepid approval.
"Bottom line is, this is a step in the right direction from where we were about to go," said Brian Lewis, government affairs director of the North Carolina Association of Educators.
Ardis Watkins, legislative affairs director for the State Employees Association of North Carolina, said state workers and retirees haven't had a raise in four years.
"(It) is not as much as we would like to see," Watkins said of the 1.2 percent raise, "but the Senate took a step in the right direction, and we're glad to see the end result."