Senate Budget Plan Includes Largest Teacher Pay Raise in State History | Eastern North Carolina Now

    Publisher's note: This post, by Brian Balfour, was originally published in the Budget & Taxes section(s) of Civitas's online edition.

    North Carolina's state Senate last night released its proposed changes to the second year of the 2013-15 biennial budget. The Senate's changes would increase previously-approved spending by less than one percent to a total of $21.16 billion. The Senate plan would spend about $170 million more than Gov. Pat McCrory's proposal. The Senate's state spending plan would represent an increase of 2.6 percent over the current fiscal year's budget, a rise of roughly $530 million. Easily the most significant initiative in the Senate budget plan is the $486 million lawmakers have set aside to provide an 11 percent pay increase for public school teachers who agree to forego their "career status" protections – also known as tenure. The $486 million figure is the estimated expenditures needed if all current teachers opted for the pay increase. If all teachers were to accept the pay raise, average teacher salary would increase by $5,800. Teachers not accepting the pay raise and also not giving up tenure status would continue on the current teacher salary scale, and receive no pay raise this year. Other significant changes included in the Senate budget plan include:

• Provision to state workers other than teachers and select UNC system employees of a $1,000 increase in combined salary and benefits. Non-instructional public school employees would receive a $618 increase in salary and benefits.
• Appropriation of $37 million to provide a 0.8 percent cost of living adjustment to retired state employees.
• Elimination of $56 million in reserves set aside for "Future Benefit Needs." This money is made available to general operations.
• A reduction of $22 million in the annual appropriation to the State Health Plan. This is in response to a recent report from the State Treasurer's Office showing that these additional funds were not needed.

• A reduction of $233 million in funding for teacher assistants. The state allotment would focus on grades K-1; previously TA's for grades K-3 have been supported.
• An $18.7 million appropriation to extend supplemental pay for teachers with master's degrees in the subject they teach.
• Establishment of the N.C. Education Endowment Fund first proposed by Lt. Gov. Dan Forest. The fund would accept private donations that would be devoted to increasing teacher pay.
• A $156 million reduction due to technical adjustments to reflect average daily membership (ADM) and certified personnel counts, as well as lottery receipts.
• A 30 percent reduction in funding for the state Department of Public Instruction (DPI), a cut of $15 million. DPI is the administrative office overseeing much of the state's public school operations.

• A $16.7 million increase in funding for "Closing the Skills Gap," which directs more funding toward programs like health care and technical education programs.

• A $5.3 million reduction in funding due to a technical change in the enrollment growth model formula for funding. The change will allow for state support reductions when enrollment declines.

• A $16 million reduction by eliminating vacant positions from the DHHS budget.
• An appropriation of $5 million for the initial staffing needs and development of a new organization that will house the Division of Medical Assistance, which administers the state's Medicaid program.
• An additional $5 million in funding to add another 1,000 slots to the Pre-K (formerly More at Four) program.
• A one-time, $21 million cut to state support for Pre-K and child care subsidies, to be replaced by federal funds. This represents a temporary increase in reliance on federal funds for recurring state obligations.
• A $59 million reduction in state spending due to new revenues from a provider assessment on all Behavior Health LME/MCO's.
• An increase of $206 million to accommodate projected rising Medicaid costs.
• $10.8 million less in Medicaid expenses via a two percent reduction in provider reimbursement rates for select providers.
• An additional $144 million to fund the Medicaid funding shortfall in the current fiscal year.

• A $1.75 million appropriation – including 25 new positions – dedicated to coal ash cleanup and future oversight.
• Provision of more than $1.1 million for natural gas exploration.

• The transfer of the State Bureau of Investigation (SBI) and the state crime lab from the Justice Department to the Department of Public Safety.