Gov. Pat McCrory presented a two-year state budget plan Thursday with $291 million more for public schools next year, an extra $287 million for larger Medicaid patient rolls and medical costs and $100 million for incentives and other efforts to recruit companies and retain jobs.
Nearly three-quarters of the additional funds for schools would go for pay raises and for teaching an additional 17,300 K-12 students next fall. For 2015-16, this means the state would pay for 678 new teachers.
It includes increasing new teacher salaries to $35,000, up from the current $33,000. It also includes paying more for teachers with master’s degrees “in a high need field,” such as science and math.
It provides money to reward high-performing teachers and to “hold harmless” senior teachers at the top of the new salary scale who would have received a $1000-a-year bonus under the old teacher pay scale.
“This budget is still extremely tight,” McCrory told reporters in releasing the proposal. He said state officials “had to make some tough choices in this budget, but we are investing in the areas that will have the biggest impact on the citizens of North Carolina.”
McCrory said that to help balance the budget, almost every state agency was told to find ways to cut spending by 1 to 2 percent.
Funds for the University of North Carolina system are cut by by $50 million in the plan. The Department of Public Instruction would face a 10 percent cut.
There are no tax increases proposed to fund general operations, but it includes asking voters to approve issuance of $1.2 to $1.4 billion in transportation bonds for roads projects and additional bonds to rehabilitate state buildings. It would put a halt to an expected drop in the state’s gas tax.
The plan includes fee hikes in a variety of areas.
Community college tuition would increase by $4 a credit hour for both in-state and out-of-state students. And admission fees at state parks, attractions and museums would go up. Many state museums are currently free to the public, but that could change.
McCrory said the 300-page budget plan “emphasizes priorities to keep our economy improving.”
The governor proposed putting $99 million over the next year into his N.C. Competes plan, largely an expansion of incentives used to lure big manufacturers to the state.
The plan puts $10 million into North Carolina’s film grant program and would restore the historic preservation tax credit.
It includes hiring engineers to study possibly unsafe dams across the state and spending $500,000 for test drilling to see how abundant natural gas might be.
McCrory’s budget represents a slightly less than $1 billion increase over the current year’s state spending. When federal grants and other spending are lumped in, North Carolina’s total spending for the coming year would be $50.9 billion under the governor’s proposal. Much of that federal money goes toward health care.
“Of our new spending of approximately $970 million in the first year of the biennium, fully 76 percent, or $741 million, will be spent on investments in education and on aiding those in poverty through Medicaid and Health Choice,” McCrory said in a letter to lawmakers accompanying the budget.
The plan puts $1.1 million in expansion funds for developing an “accountable care organization” model of Medicaid that would lean on in-state doctors, hospitals and other health care providers. That plan has competed with a rival vision put forward by state senators, who would be more aggressive in both cost cutting and use of out-of-state managed care companies.
It puts $4 million into improving mental health care for all inmates and another $2.2 million to bolster health care staffing at Central Prison. This includes opening 72 existing mental health beds at Central Prison that have been unavailable due to staffing constraints.
The plan shifts state parks, state aquariums, the N.C. Museum of Natural Sciences and the N.C. Zoo from the Department of Environment and Natural Resources to the Department of Cultural Resources.
It moves the Division of Animal Welfare from the Department of Agriculture to the Department of Public Safety, a move animal advocates have been seeking.
It boosts court spending by only $6 million, with $10 million more in 2016-17. It privatizes the state motor fleet, creates a Department of Military and Veterans Affairs and institutes a performance-management system for state employees.
The budget plan covers spending through June 2017, though much of the focus is on the 12 months that will begin July 1. It calls for spending about 2.1 percent more next year overall, which is lower than the forecast percentage increases for inflation plus the state’s population.
The governor’s budget plan now goes to legislators, who will begin writing their own budgets in a process that should conclude by the end of June.