Senate leaders explain budget plan

Posted May 20, 2013

— State Senate budget writers say their $20.58 billion budget proposal is a balanced effort that meets "the fundamental responsibilities of state government" with resources currently available, while covering a big increase in Medicaid costs and providing funding for tax reform efforts. 

The budget team met with reporters Monday morning to answer questions about the 413-page document.  

Senior chairman Sen. Pete Brunstetter, R-Forsyth, says the plan's top-line numbers are "fairly consistent" with Gov. Pat McCrory's recommended budget, and that no one area was singled out for cuts.

However, the details of the budget include some big changes and targeted cuts.

"We're making hard decisions to divert funding from critical programs, and sometimes that means tough decisions for those left behind," Brunstetter said. "Bottom line, we're doing what we can with resources available to perform fundamental responsibilities state government has."


The area where that realignment is most evident in the Senate plan is in economic development efforts, especially in rural areas. The NC Rural Center would cease to receive state funding, as would a half-dozen targeted regional programs, to be replaced by a new Rural Economic Development Division within the state Commerce Department.

Sen. Harry Brown, R-Onslow, said the new division would offer "one-stop shopping" for rural economic development projects, including a new Rural Infrastructure Authority to manage water and sewer funding assistance.


Budget writers pointed out repeatedly that the plan adds $1.3 billion in overall funding for Medicaid over the next two years. But that increase is required to pay for enrollment growth and federally mandated changes in the entitlement program.

Meantime, the Senate plan also reduces benefits, lowers reimbursement rates for providers, and raises co-pays for those in the program. 

Medicaid is an especially difficult area for budget cuts. Because of federal program regulations, states can't simply decide to make big changes in eligibility rules or to cut out a service entirely. Large-scale program changes require federal approval of what's called a "State Plan Amendment." The approval process can take many months.

Instead, Brunstetter said, the Senate budget relies on changes the state can make on its own to try to control program costs. 

"We're at a crossroads on Medicaid," he said. "All these things that we talk about that we want to do, they're all running right into the Medicaid juggernaut, and we've just got to get it fixed."

The proposal would freeze or cut reimbursement rates for hospitals, some of which will take additional hits under the Affordable Care Act because the state chose not to accept the federal Medicaid expansion. 

Even with the rate decreases, Brunstetter said he believes most hospitals "are going to come out ahead" because of the added money in the system, although he concedes they would have to see more patients and provide more services to do so.

"We think there's room for efficiencies in that system. We think they can do this," he said.

State employee and teacher pay 

The Senate plan doesn't include a raise for state employees or teachers in 2013-14, although it sets aside $10.7 million for teacher merit pay in the 2014-15 fiscal year.

McCrory's budget proposed a 1 percent pay increase, but Brunstetter said the $400 million Medicaid shortfall consumed the money to pay for those raises.

Lee Quinn, Broughton High history teacher Teachers: Budget reflects lawmakers' lack of respect for education

"We understand why folks want pay adjustments," he said. "Ultimately, we feel like we're better working on trying to get North Carolina competitive again, get people working again."  

That argument doesn't wash with some longtime Wake County teachers.

"It's certainly indicative of the ethos that people who do the work in our schools are not valued and education is not valued," said Lee Quinn, who teachers U.S. history at Broughton High School in Raleigh.

"I think we just want a little pat on the back, saying, 'You're doing a good job. We value what you do in school,'" said Dave Corsetti, a physics teacher at Broughton High.

The budget does include $1 million for a salary study of state employees, requested by the McCrory administration. 

Teachers also question the Senate proposal to end tenure for veteran teachers. Lawmakers want to replace the so-called "career status," which gave teachers with at least three years of experience some due process rights before they could be terminated, with one- to three-year contracts for teachers.

"We're not going to be able to attract good people if they feel like they can be fired or dismissed a little prematurely," Corsetti said.

"We need to give these young teachers, with our help and with our assistance, we need to give them a chance, and one year is too short for the chance to be given," said Carol Allen, who teaches English at Broughton High.

The Senate also wants to implement merit pay for teachers in 2014-15, but teachers said that system is too subjective and discourages collaboration among teachers. They said they would like to see merit-pay funding redirected for professional development and recruiting new teachers.

Pre-K cuts 

Contrary to McCrory's proposal to add new seats in NC Pre-K, the Senate plan cuts 2,500 seats ($12.4 million) in 2013-14 and 5,000 ($24.8 million) the following fiscal year. The funding for those seats is moved to the state's child-care subsidy program.

Brunstetter said the move was made because child care subsidies can serve more children than Pre-K can. "It was just a desire to get more bang for the buck," he said.


The Senate plan also doesn't include funding for payments to the state's surviving victims of its eugenics program. The restitution program is a priority for McCrory and House Speaker Thom Tillis, but it's found little support in the Senate.

"I think we're very sympathetic with the situation [the victims] find themselves in. It was a terrible time in our state's history," Brunstetter said. "But we've got $1.2 billion in Medicaid issues that we're dealing with."

Electric/hybrid car fees

Under the Senate plan, owners of electric vehicles would be assessed an additional $100 yearly license fee.  Hybrid owners would owe an extra $50 a year.

Sen. Neal Hunt, R-Wake, said that's because the state's highways are maintained through the gas tax.  Hybrids and EVs, he said, "pay less or no gas tax" and are "using the roads for free."

"We're trying to have them pay their fair share," Hunt said.


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  • 42_wral_mods_suck_i'm_gone May 22, 2013

    I did not see this discussed on WRAL but the Senate cuts NC Wildlife Resources Commission's budget by 50%.

  • HDStreetGlide May 22, 2013

    Again the government take more from the middle class working people of NC to put more money into a broke system that keep growing which is called MEDICAID...helping the low income family to have better health service, while the middle class folks can't afford to pay for the needed health care that they need.. I would get more help if I quit my job, cancel paying for health insurance, sell the pain pills on the street that Medicaid pays for.

  • nceducator79 May 21, 2013

    I don't think it says it in this article, but lawmakers also want to get rid of the 10% raise that teachers earn when they earn their master's degree....effective the 2014-2015 school year, though previous teachers will be grandfathered in if they had master's pay before that.

    In what profession do you not reward someone for furthering their education. I just have a few more classes left for my master's and it has been an incredible experience that has made me a better teacher. My goal...to get out of NC within the next 5 years and move back north to teach. NC will lose all of the good teachers eventually if they don't pay them competitive wages.

  • whatelseisnew May 21, 2013

    I always laugh when anyone makes these claims about how higher mileage vehicles caused the problem. Well, we went through a couple of decades of big suvs running around using up huge amounts of fuel. In 1989, this State added 6 cents per gallon to fuel taxes, (a temporary tax we were promised). Then the lefties proceeded to steal from the Highway Trust Fund. We had a couple of significant surpluses along the way, did that get spent on infrastructure? NOPE. The hybrids and other high mileage vehicles are really just starting to reach a significant number. The real problem is this State under leftist control, grew Government and programs instead of spending the money on one of the core functions, infrastructure.

  • whatelseisnew May 21, 2013

    " Yes, let's just warehouse the kids, don't prepare them for kindergarten and beyond! Just one more way the Republicans are working HARD to destroy the public school system (a goal of ALEC!!)"

    The lefties destroyed the public school system long ago. The best solution is getting kids out of that miserable system not put them in the hands of Government clowns for even more years.

  • xylem01 May 21, 2013

    Yet no one mentions the trial of Rep. Stephen A. LaRoque and all the money he took as an entitlement.

  • rushbot May 20, 2013

    Sen. Neal Hunt, R-Wake, said that's because the state's highways are maintained through the gas tax. Hybrids and EVs, he said, "pay less or no gas tax" and are "using the roads for free." ybrids and EVs, he said, "pay less or no gas tax" and are "using the roads for free."

    "We're trying to have them pay their fair share," Hunt said. .. ...........................hey mr hunt..not everyone can get money as easily as you (A disclosure report for Sen. Neal Hunt lists an Oct. 17, 2012, donation of $4,000 from “Chase Burns Trust, c/o Chase Burns.” Sen. Wesley Meredith’s report also lists receiving $4,000 simply from “Chase Burns Trust” on Oct. 12, 2012. Both donations are listed as coming from an “Outside Source,” rather than from an individual or political committee.) see http://pulse.ncpolicywatch.org/2013/03/18/new-research-shines-light-on-nc-campaign-donations-of-alleged-racketeer/ how bout you take a moment and explain it, instead of fighting technology!!!

  • beaupeep May 20, 2013

    "Different people were elected because of the gerrymandering by the Republicans." exteacher

    If you think that, I hope the "ex" part is true.

  • Spock May 20, 2013

    "Different people were elected because of the gerrymandering by the Republicans." exteacher

    Is that the best excuse you have? Old, played by both parties without any merit.

  • exteacher May 20, 2013

    "Unfortunately this GA has a big hole to dig out of as they were given a big mess from previous administrations. Tough decisions have to be made and not everyone is going to agree, but they should at least be afforded the opportunity to implement their plan. If the voters don't like the outcome, well, they can vote differently in the next election. I think there is a reason why voters elected different folks for the GA - because the previous ones weren't cutting it so time to try something new."

    Different people were elected because of the gerrymandering by the Republicans.