Senate budget slashes TAs, reserves, AG's Office

Senate leaders Wednesday rolled out a $465 million teacher raise proposal, but declined to say how they would find the money for the increase. It appears that much of the plan would be paid for by other cuts within the education budget.

The second-largest cut in the Senate budget occurs in reserves. Senate budget writers are reclaiming $110 million, or about 33 percent, of the $329 million earmarked for reserves in last year's continuation budget.

The adjusted plan would wipe out the $56 million lawmakers set aside last year as a reserve for future benefit needs of state employees. It would cut the Job Development Investment Grant fund by $15 million, or nearly a quarter. It also takes advantage of $22 million that had been set aside for State Health Plan premium increases that Treasurer Janet Cowell said earlier this month wouldn't be needed to keep the plan in the black.

There's also a steep funding cut for the Department of Justice, led by Attorney General Roy Cooper. The DOJ budget would be cut by 59 percent, from $83.2 million to $34 million, with 635 positions eliminated. 

Most of those cut positions – and the money to pay for them – would be transferred to the Department of Public Safety in the context of a proposal to move the State Bureau of Investigation from the DOJ to DPS, a move strongly opposed by Cooper. The state Crime Lab and the Division of Alcohol Law Enforcement would also be transferred to DPS.  

"For 75 years an independent SBI has without bias rooted out corruption in the executive and legislative branches," Cooper said in a statement. "With this move, the legislature protects itself and the governor at the expense of government integrity and ignores North Carolina law enforcement's opposition."

Cooper, a Democrat, has already expressed interest in challenging Gov. Pat McCrory in 2016, and he has been a frequent critic of the Republican legislative leadership. 

The Senate budget gives the governor the power to appoint the head of the SBI. It also puts DPS, not the DOJ, in charge of mandatory criminal records checks. 

The Senate plan adds $196 million to Medicaid spending but offsets that through substantial cuts to Medicaid administration, mental health, early education and NC Health Choice.

An additional $9.6 million in revenue would come from higher fees for Alcoholic Beverage Control permit applications and renewals. Another $6 million would come from phasing out state "hold-harmless" payments to counties dating from 2008, when the state took over Medicaid payments for counties in exchange for a share of their local tax revenues.  

The proposal also establishes an hazardous materials facility fee to be paid to DPS, and gives McCrory the ability to reassign exempt state employees to new jobs more than 35 miles from their current positions.The governor has asked lawmakers for that statutory change. 

It also requires the State Treasurer's Office to undergo an independent third-party audit of the state pension fund and directs the Department of Transportation to cut extraneous management personnel, 

One interesting provision would give the General Assembly special treatment in the courts. Under current law, challenges to state statutes are heard by a Wake County Superior Court judge. Under the Senate proposal, any case not related to apportionment or redistricting would be heard instead by a three-judge panel, and any ruling on a constitutional challenge would be automatically stayed pending appeal. 

Legislative leaders are currently fighting constitutional challenges to several key pieces of legislation, from teacher tenure to voter ID to abortion rights. 

The Senate plan also includes $1 million for medical examiners, $1.75 million for cleaning up and regulating coal ash ponds and $3 million for an "Outer Banks Land Management Reserve." Senate leaders also have proposed $1,000 raises for state workers – about $809 in cash and the remainder in benefits.