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McCrory unveils budget as legislators return to work

By Abbi Overfelt

May 14, 2014

RALEIGH (AP) — Gov. Pat McCrory and his top financial aide described the governor’s $21 billion state budget proposal for the coming year Wednesday by highlighting what’s absent in his spending plan about as much as what’s included.


McCrory offered his adjustments to the second year of the two-year North Carolina budget approved by the General Assembly last summer and that he signed into law.


The Republican governor said what’s still included is the signature piece of his plan he announced last week— raises for public school teachers and almost all state employees. Budget director Art Pope, meanwhile, gave his take on how those raises are feasible despite a $445 million revenue shortfall this year.


Prudent budget decisions, including more than $600 million in unspent funds from the current fiscal year, helped McCrory fill the hole and pay for $263 million in salary and benefit improvements, Pope said.


And what’s absent from this spending plan is what Pope read as a “Top Ten” list of accounting measures no longer used to close shortfalls — including temporary tax increases and taking money from highways and local governments.


“We’re changing the culture,” Pope told reporters at a news conference. “We’re doing transparent accounting.”


Also on Wednesday, legislators returned to work, met by some interest groups calling for the GOP-controlled Legislature to reverse course.


“We are not in the middle of a Carolina comeback, we are in the middle of a Carolina setback,” said the Rev. William Barber, the head of the state National Association for the Advancement of Colored People.


Barber called for a repeal of new laws on voter ID requirements, teacher salaries and unemployment insurance that were passed by the Republican-led body a year ago.


State Rep. Garland Pierce, who along with Rep. Ken Goodman represents Scotland County and also chairs the North Carolina Legislative Black Caucus, met with the North Carolina Association of Educatators on Wednesday. Pierce shares the group’s belief that McCrory will be unable to fulfill his promises to increase teacher pay across the board.


“Teachers are aware and are not fooled by the election year rhetoric,” said Earline Parmon, first vice chair of the association, in a statement. “They realize in order to give them the raise the governor is proposing means the money has to come from somewhere, they know the money has to come from somewhere.”


The governor wants the University of North Carolina system to cut 2 percent from its budget, with some exceptions, or about $44 million. Such reductions have been asked of university leaders for years. He’s also decided to keep funds for teacher assistants in grades K-3 at current-year levels for next fall, rather than expand funding to address enrollment increases.


“I believe that giving our current teachers and public school employees a pay increase is a higher priority than hiring additional assistants at this time,” McCrory wrote in a letter to the budget adjustments he wants starting July 1.


Pierce, Goodman and State Sen. Gene McLaurin have all ranked teacher pay raises among their top concerns.


State employees and teachers have received one pay raise since 2008.


The governor also wants to increase the special assessment hospitals pay to drawn down larger Medicaid payments for the state and hospitals from the federal government. The change, while resulting in only $15 million more for the state, comes as hospitals are struggling with increased costs for Medicaid patients.


“Our community hospitals cannot continue to offset state underpayments for Medicaid and fulfill our role as the health care safety net and our mission to care for any North Carolinian, all day, every day,” North Carolina Hospital Association Executive Vice President Hugh Tilson said in a release.


McCrory wants to give teachers with at least eight years of experience raises ranging from 2 to 4.3 percent. McCrory and legislative leaders already agree they’ll raise the minimum salary for early-career teachers this year to $33,000. Most state employees would see $1,000 more — $809 of which would go to higher salaries, with the rest going to their pension totals, Pope said.


Abbi Overfelt contributed to this story.