Proposed House budget gives raises to state employees, teachers, retirees

Posted May 18, 2015

— North Carolina would spend $1 billion more in state tax dollars over the next fiscal year under a budget bill and related money report posted online Monday morning, giving the public a first look at the overall spending plan.

Pieces of the spending plan rolled out last week, while committee members got a first look at money-raising provisions late Sunday night.

Even with all of those pieces in the public domain, there are still some previously undiscussed items in the overall documents.

Overall, tables in the House spending plan show state spending rising from $21.1 billion this year to $22.1 billion in the coming fiscal year, with the state's fortunes buoyed by better-than-projected income tax collections this year. Those figures count only money raised from state income and sales taxes or fees for government services. Once federal grants for things such as Medicaid and transportation funding are counted in, the entire state budget is roughly $50 billion.

Among some of the more newsworthy pieces of the newly rolled out bill are:

  • Increasing the salaries of most rank-and-file state workers by 2 percent, while giving the University of North Carolina and community college systems "flexibility" in giving raises to state-funded workers.
  • Giving state retirees a 2 percent cost-of-living increase.
  • Following through on a promise to raise starting teacher salaries to $35,000 per year, with all other teachers getting at least a 2 percent raise. More is set aside for teachers moving from one step on the salary schedule to the next.
  • Providing raises to the governor, members of the Council of State and judicial branch officials. The governor's new salary would be $145,110, slightly less than the money set aside for the chief justice of the state Supreme Court, who would take home $146,495 under the House plan.
  • Raising the amount of money available for film incentive grants from $10 million this year to $60 million for each of the next two fiscal years. The state exhausted its current funding by backing three productions earlier this year.
  • Setting aside $200 million each for the state's savings reserve and renovation funds.
  • Setting aside $21.9 million in the next fiscal year and another $53.7 million in 2016-17 to improve the ports at Morehead City and Wilmington.
  • Plowing more money into funds designed to encourage entrepreneurs in the state, including $40 million in state money for a venture multiplier fund. Gov. Pat McCrory has sought the venture fund, which would need to be matched by private dollars, as a way to help launch nascent technology firms in the state.
  • Setting aside $2.5 million in 2015-16 and $3.7 million the following year to plan the transition for North Carolina's Medicaid program. Lawmakers have said they want to move from away from the current fee-for-service system, although the House wants to move more slowly than the Senate. Senate President Pro Tem Phil Berger told the North Carolina Chamber earlier this month that he wants to put more money aside so that a transition could begin right away.

Critics on the left and the right blasted the House budget proposal nearly as soon as it rolled out.

The conservative Americans for Prosperity objected to provisions that renew tax credits for renewable energy development and historic redevelopment programs.

"Please oppose any budget legislation, amendment or committee substitute that seeks to increase spending through these special interest handouts," AFP State Director Donald Bryson wrote to lawmakers Monday afternoon.

Meanwhile, critics on the left say the budget asks too little of the state's businesses and wealthiest citizens. In particular, the North Carolina Budget and Tax Center said the state should not allow the corporate income tax to dip from 5 percent to 4 percent next year.

"Investments in early childhood, education, job training, health care and public safety ensure that North Carolina’s communities thrive," said Alexandra Sirota, the center's director. "While the House budget reflects some of these investments, there are many others – school nurses, affordable housing, professional development for teachers, community economic development – that don’t receive the funding needed to truly make an impact on people’s lives."

Teachers also expressed reservations about the spending plan, saying it doesn't do enough to ensure every student will receive a quality education.

"The House’s budget takes some small steps over the governor’s earlier proposal, but it will not make a dent in North Carolina’s national per-pupil expenditure and average teacher pay rankings," North Carolina Association of Educators President Rodney Ellis said in a statement. "North Carolina is better than this. Our students and public schools deserve a bold plan that will help them be successful and elevate North Carolina into the forefront of public education in the Southeast and the nation.”

The next state budget will take effect for the fiscal year beginning July 1. Once the House passes its plan, the state Senate will offer its own proposal. those two pieces will then need to be reconciled.


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  • Roy Hinkley May 19, 2015
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    Frank uses the right-leaning Tax Foundation figures.

  • Jeff Edwards May 18, 2015
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    Where do you get those numbers? Per capita tax revenues went up about $100 per person in NC. They didn't lower taxes. They just spread it around so most are paying more and they don't really realize it. The state Republicans aren't really for lowering taxes. They are for lowering THEIR taxes at the expense of the lower classes.

  • Aanritsen Deur May 18, 2015
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    - Yep right upon the backs of some of the poorest in the state - the unemployed, the disabled, the elderly and children.

  • Aanritsen Deur May 18, 2015
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    Don't many of the "proposed" budgets say that, then retract on the raises of state employees after it's passed?

    How many times have we seen that happen in this state through the years?

  • Tom Boswell May 18, 2015
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    Lets see the last time the Democrats were fully in charge they created in 2010 a budget that for the two years ending June 30, 2012 created the country's fifth largest budget deficit of 2.5 billion. Republicans now fully in charge while cutting our tax burden from the 6th highest to the 34th highest have created a 400 million dollar surplus.