Local News

Easley Releases Budget, Wants To Make Education No. 1 Priority

Posted May 10, 2006 10:16 a.m. EDT

— Gov. Mike Easley on Tuesday proposed an $18.9 billion budget for the next fiscal year that would raise teacher pay 8 percent, cut the sales tax by a quarter-penny and spend nearly $90 million to accelerate mental health reform.

Easley's budget would set aside $323 million to increase public school teacher salaries as part of a previously announced effort to raise them above the national average by 2008.

"I developed a plan and this is what it's going to take to get there," Easley said after releasing his plan. "We're losing teachers and we need more."

Other rank-and-file state employees would get a 4 percent increase -- the largest raise in years, but not enough for some legislators who believe those workers suffered most from budget problems earlier this decade.

"We would like a fair and equitable raise," said Toni Davis of the State Employees Association of North Carolina, which wants a 5 percent across-the-board raise for all employees, including teachers. "We believe five is fair for all."

"Four percent is a pretty substantial increase, and I wish that I could do more," said Easley. "State employees have had a lot of input in this budget."

Some members of the state Democratic Caucus called for a 7 percent raise across the board.

"What's fair for one group is fair for the other," said Rep. Linda Coleman, D-Wake. "Whether it's 7 percent or 5 percent, it should be the same for both groups.

The plan would raise overall education spending for public schools, community colleges and the University of North Carolina system by $864 million compared to this year. Easley emphasized that was in addition to a projected $425 million in revenues from the North Carolina Education Lottery.

Easley and other lawmakers have insisted that current education funding would not be siphoned away to other non-education state agencies and replaced with lottery profits.

"With the lottery in place, we have a secure source of funding for early childhood programs in addition to new resources for school construction and college scholarship for those that cannot afford to pay," Easley said in a prepared statement.

As announced late last week, Easley wants the Legislature to cap the gasoline tax at its current rate of 29.9 cents per gallon. He also would restore $195 million to the Highway Trust Fund to essentially repay a loan to the general operating fund from four years ago and to reduce a long-standing transfer by $80 million.

Reducing the state's share of the sales tax by 0.25 percentage points would cost nearly $200 million in revenue. If approved, consumers in 99 counties would see their sales tax rate decline from 7 percent to 6.75 percent. In Mecklenburg County, it would fall from 7.5 percent to 7.25 percent.

Easley considers the quarter-penny drop a move toward eliminating a "temporary" half-cent increase that has been on the books since 2001.

"It gives everybody a little tax relief," he said.

Republicans want the entire half-cent to be eliminated this year. Senate Democrats would like to see any sales tax decrease coupled with reducing the top individual income tax bracket of 8.25 percent.

The governor also proposed spending an additional $89 million to replace federal reductions in community-based services, $15 million for the mental health trust fund and $16 million to expand assistance to local efforts to treat patients in their communities.

The Department of Health and Human Services _ the second largest state department in the state behind the public schools, would reduce overall spending by $55 million compared to the budget already approved for the fiscal year starting July 1.

Easley's budget proposal also:

  • seeks to raise the minimum wage to $6 per hour from $5.15.
  • sets aside $37 million to cover extra fuel costs for school buses and state buildings.
  • would expand Easley's Learn and Earn and theme-based high schools.
  • The extra $2 billion lawmakers can use this year includes a nearly $1.1 billion revenue surplus projected for the year ending June 30, the largest as a percentage of the overall budget in more than 30 years.