Having failed to pass a full new state budget, Republican lawmakers on Thursday finalized piecemeal funding plans that implement already-planned teachers raises and also include some additional funding for child care subsidies — but do little else to address budget issues or touch most of the state's $1 billion budget surplus.
The teacher raises for this coming fiscal year, which starts July 1, were approved as part of last year's budget. Republicans in the state House had recently proposed using the new budget year's billion-dollar surplus to boost those raises even higher, but that plan went nowhere in face of opposition from Republicans in the state Senate.
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However, lawmakers still needed to take official action to implement the raises that were already approved last year. That bill, Senate Bill 332, passed unanimously through the legislature Wednesday and Thursday and is now on Democratic Gov. Roy Cooper's desk.
A separate mini-budget proposal, Senate Bill 357, also passed with unanimous support and was sent to the governor. It would authorize $67.5 million in state spending on child care subsidies.
That's only a fraction of what North Carolina is losing from the federal government starting July 1, due to the expiration of Covid-era subsidies. But it should at least buy lawmakers several months to work on a more permanent solution.
Senate leader Phil Berger said that while the money isn't everything advocates wanted, there's also a fiscally conservative argument to be made that the government shouldn't be subsidizing child care at all — although clearly not an argument that won out at the legislature this year.
"Dealing with child care is something that, 50 years ago, wouldn't have been necessarily considered an appropriate thing [for the government to do]," Berger said. "But it is something that is important to a lot of people in the state of North Carolina."
Meanwhile, GOP lawmakers failed to accomplish their bigger plan to spend an extra $487 million on private school tuition vouchers. Although both chambers have passed their own versions of that proposal, neither would take the final vote — a casualty of the contentious budget negotiations between the two chambers.
House Speaker Tim Moore told reporters Thursday he would only pass it as a package deal with additional public school teacher raises. Senate leader Phil Berger declined, and negotiations went no further.
"We feel like it needs to be done in a comprehensive manner, for doing more as well with the surplus to help traditional public schools," Moore said.
So while that breakdown in budget negotiations over how to handle private school versus public school funding scuttled the main budget talks, Moore and Berger both said they wanted to make sure at least some child care funding was approved before the federal funds expire on Monday.
"This is a key thing that we need to fund because we know we need a workforce," Moore said. "And there are mostly women who are affected by this, but some men as well, who cannot enter the workforce because they cannot afford or do not have access to child care. So that's why we've funded at the level that we have. Frankly, I'd like to see us do more."
Loss of federal funds
Many child care centers had used the Covid-era federal funding to give their employees raises while they tried to compete in a post-pandemic jobs boom. Low unemployment rates have led to rising salaries across many industries, as employers compete for employees.
In 2019, federal data shows, the average child care worker in North Carolina was making $23,550 a year — the equivalent of $11.32 per hour in a 40-hour work week.
But even previously low wage jobs, such as those in fast food, now tend to offer higher-paying hourly rates. So child care wages grew by 25% between 2019 and last year. By 2023, the average child care worker in North Carolina was making just under $30,000 — the equivalent of more than $14 per hour.
But with so many businesses paying for those raises using the federal funding, the loss of those funds led to concerns that child cares would have to either raise rates on parents, cut salaries or, if neither option seemed feasible, shut down entirely.
Advocates predicted that hundreds of child care centers would close down, potentially leading to thousands of parents of young children being forced to quit their jobs or reduce their hours. There's already a months-long waitlist for child care in much of North Carolina, even without hundreds of centers closing their doors.