Budget plan gets initial OK in General Assembly

State lawmakers voted Tuesday to tentatively approve the final version of the state's $20.6 billion spending plan. Final approval in both the House and Senate is expected Wednesday.

Democrats called it a "scorched-earth budget" that leaves the state ranked 46th in the country in per-pupil spending and 48th in the country for teacher pay while diverting money to private schools in 2014. More money could have been devoted to public education, they said, if Republicans didn't push through various tax cuts, which Gov. Pat McCrory signed into law Tuesday.

"This is your third budget, and at some point, you're going to have to take ownership of what you're doing here," said Sen. Martin Nesbitt, D-Buncombe.

Sen. Pete Brunstetter, R-Forsyth, said Democrats need to take ownership of the state's past fiscal problems, noting that the GOP-crafted budget fully funds the State Health Plan and Medicaid, both of which were drowning in red ink in recent years.

"This budget continues to put us on track," Brunstetter said. "We're healing our balance sheet. We're doing what we need to do."

The compromise, unveiled late Sunday night, spends less on K-12 education than the House's initial budget proposal, though Republican leaders said it would still provide more money than schools had to spend in the past year. 

"It’s hard work," said Rep. Craig Horn, R-Union. "Both sides of the aisle know how hard and painful these decisions are, but it’s a step in the right direction."

Education was the primary focus of the debate in both the House and Senate, with Republicans touting the addition of 2,500 pre-kindergarten seats, as well as the end of teacher tenure and the creation of school vouchers next year.

Rep. Nelson Dollar, R-Wake, said GOP leaders are planning to use unspent reserves next year to provide “much needed raises for teachers (and) state employees and cost-of-living increases for our retirees” in 2014-15.

"Promises don't feed families," said Rep. Rick Glazier, D-Cumberland.  

Rep. Bryan Holloway, R-Stokes, replied that a raise for teachers in the second year of the spending plan "is better than no raise at all."

"We all want to give more, but where’s the money going to come from?" Holloway asked. "What do you want to cut?"

"I think I could find the money in the very large tax cuts that were given to out-of-state corporations and the wealthiest individuals in our state," replied Rep. Susan Fisher, D-Buncombe. "I think the money’s there."

"We are abandoning public schools and the teachers in those schools with this budget," Fisher said.

Sen. Josh Stein, D-Wake, said Republicans are "locking in recession-era budgets," noting that classroom funding isn't keeping up with enrollment growth, even though the state economy is starting to recover from the recession.

The budget puts more pressure than ever on teachers, Stein said, noting class sizes will increase, 3,800 teaching assistants in elementary schools will lose their jobs and tenure rights will be eliminated.

"You chose tax breaks for the wealthy over public education," he said.

Sen. Harry Brown, R-Onslow, argued that the budget fully funded enrollment growth in public schools, community colleges and universities.

Sen. Gladys Robinson, D-Guilford, said she fears "teacher flight" from schools, which will continue to be responsible for educating most North Carolina children.

"You say you want to improve the economy, educate everybody and make them job-ready, but the budget doesn't support that," Robinson said.

Sen. Ralph Hise, R-Madison, blamed spending restraints throughout the budget on the need to control skyrocketing Medicaid spending.

"A federal program is strangling the budget of North Carolina," Hise said. "Nothing compares to the scope of what we're having to deal with in Medicaid."

Dollar touted the budget's $10 million fund to compensate victims of the state's former eugenics program as a "moment of profound historic significance."

"Today is the day history will mark that this General Assembly did what was morally right in the eyes of God,” he said, urging House Democrats to support the measure. “Will you sacrifice your partisan pride to do what you know is morally right today, or will you simply sit on the sidelines of history?”

Democrats congratulated GOP leaders on the inclusion of the eugenics funding, but they said it wasn't enough to offset cuts to education and health care to garner their support.

"We're compensating one set of victims and creating another set," said Sen. Earline Parmon, D-Forsyth, criticizing the classroom cuts.

The Department of Health and Human Services also received less money in the final plan than in the House's plan.

"We have taken a lot of cuts," said Rep. Marilyn Avila, R-Wake. "We have a lack of funding, but we have no lack of citizens to take care of." 

Avila said service providers are being asked to look for increased efficiency. Many will also see lower reimbursement rates.

Rep. Verla Insko, D-Orange, called the cuts to DHHS and education "fiscally irresponsible and morally irresponsible," blaming them on the tax cut package, for which the budget sets aside around $500 million over the next two years.

"We gave an unnecessary windfall to the wealthiest in this state," she said.