Raleigh, N.C. — Senate leaders said Tuesday afternoon their budget will both cut taxes and raise teacher pay while staying within a $22.225 billion budget cap.
However, Senate President Pro Tem Phil Berger and Budget Chairman Harry Brown ticked off a litany of "highlights" during a news conference, although a complete version of the budget was not expected to be posted until late Tuesday.
"It lays the foundation to dramatically increase average teacher pay," said Brown, R-Onslow, referencing the plan floated last week to bring average teacher pay to over $54,000. It also sets aside money for a $2,000 bonus for principals.
Another education-related pay feature sets aside $10 million for a pilot program to provide bonuses to third-grade teachers based on how their students perform on reading assessments.
Workers in other areas of state government will also see raises, but they will vary. For example, State Highway Patrol troopers, court clerks and magistrates would get their annual experienced-based step increases under the plan, which also sets aside $16 million to boost pay for correctional officers.
Other state workers would be eligible for one-time performance bonuses as well as merit-based pay raises for workers doing exceptional jobs or in hard-to-staff positions. Language in the bill, Brown said, would prohibit department heads from offering those across the board, and Senate leaders say they did not include a cost-of-living increase for state retirees because it was too expensive.
Brown and Berger, R-Rockingham, both said they would offer an across-the-board personal income tax cut by expanding the zero bracket, the amount of money on which a taxpayer pays no income tax. That tax cut is the same size as one offered by the House, but it is phased in over two years rather than four.
House leaders also offered a pay raise to all state employees in addition to a raise for teachers.
Those two items are likely the be the biggest sticking points in negotiations after the Senate approves its plan. That final vote is likely to come in the early morning hours of Friday.
"Though the details have yet to be released, I am pleased to hear that the Senate shares many House priorities, including raises for teachers and state employees, continued tax reform and increased investment in the rainy day fund," House Speaker Tim Moore said. "While we most certainly will not agree on every aspect, I am hopeful we will begin to conference the budget in short order and adjourn in a reasonable amount of time."
Senate and House leaders have both said they would like to wrap up this year's legislative session by July 4. That would give the two chambers just about a month to bridge their differences on the budget and wrap up any other work.
Senators say they included a controversial change to the University of North Carolina system's tuition structure in their budget plan. Students at all UNC system schools would pay the same tuition rate every year for four years, rather than seeing the possibility tuition will rise over their time in school. In addition, tuition at five UNC system schools – Elizabeth City State University, Winston-Salem State University, Fayetteville State University, UNC-Pembroke and Western Carolina University – would be capped at $500 per semester for in-state students.
That plan has drawn fire from critics, who say that such a tuition cut would leave those schools underfunded. African-American leaders say the plan would undercut the value of degrees from HBCUs and could force those schools to close or dramatically change how they operate.
Berger insisted it was an effort to honor the state constitution's mandate to offer a free as possible college education.
"I think, far from cheapening education as a result, what it does is it creates the opportunity for more people to have the benefit of a college education," Berger said.
Some portions of the Senate plan anticipate future budget years. For example, the budget sets up a $34.8 million reserve for school vouchers that would put tax money toward tuition for private schools. That budget highlight claims it will help 20,000 students attend private school through the program over the next 10 years, but that number would require future legislatures to hike the program's funding by $10 million over that period.
The current year's legislature cannot bind future General Assemblies, so that budget item works more like a statement of intent rather than actual spending for all but the year that starts July 1.
Other budget highlights put forward by Berger and Brown include:
- Invests over $9 million to reform North Carolina’s child welfare program by requiring additional training, providing more positions and expanding in-home services to support children’s safety while keeping families together.
- Continues the commitment to improving education and retention of rural physicians by directing nearly $11 million to help establish new medical school programs in Fayetteville and Asheville.
- Funds nearly $500,000 for Zika prevention and detection.
- Directs proceeds from the sale of the Dorothea Dix property go toward services for the mentally ill, including $2 million to establish child facility-based crisis centers and $12 million to expand inpatient behavioral health beds targeting rural areas.
- Funds more than 200 additional slots for Alzheimer’s patients and their families through the Community Alternative Program for Disabled Adults.
- Allocates nearly $3 million to improve customer service and decrease wait times in high-volume Division of Motor Vehicles office locations.
- Increases state assistance for urban and rural transit systems by $4 million and state aid to general aviation airports by $15 million.
- Provides nearly $14 million in additional funding to improve freight rail tracks, crossing safety and industrial, port and military access.
- Makes strategic investments in public safety by providing $1.3 million to get the Western Crime Lab up and running and $640,000 for equipment upgrades in the other two crime labs.
- Includes $2.1 million to help close out the longstanding backlog at the State Crime Lab once and for all.
- Provides $250,000 to digitize mental health records to help streamline background checks for gun purchases.
- Invests $500,000 for School Risk Management Plans to be developed in 835 public schools to help keep children and teachers safe while they are at school.
- Establishes a cybersecurity program for disabled veterans to develop their skills while protecting the state against cyber attacks.
- Invests $12 million to implement state-of-the-art software to ease tax filing for North Carolinians.