Teachers gain 7 percent raise in budget deal
RALEIGH — North Carolina House and Senate Republicans unveiled the details of a $21.25 billion budget Tuesday that gives an average 7 percent raise for teachers now among the lowest paid nationally and preserves teacher assistant positions but cuts Medicaid reimbursement for health care providers by 1 percent.
House Speaker Thom Tillis and Senate leader Phil Berger added details to the compromise budget plan and said votes are expected by week's end.
The compromise comes after weeks of impasse and prodding from Gov. Pat McCrory to draft a budget with limited teacher pay raises that avoids big cuts to Medicaid and other areas of education. The new fiscal year began July 1.
The details come days after legislative staffers reported income tax revenue for 2014 is expected to fall $205 million short of earlier projections because the wages of North Carolina workers haven't grown as fast as forecast.
Democrats criticized Republicans who control the Legislature for income tax cuts last year now projected to cost $680 million in 2014.
The compromise budget plan will require up-or-down votes from lawmakers, without changes.
"Why are we rushing this through when we have all these questions?" asked Rep. Larry Hall, D-Durham. "All this bad information has been presented and then these same people are now saying 'Hey just take our word for it. We're going to cut a deal we're going to force you to vote for it."
Berger said the shortfall was accounted for in the budget and said press coverage of it had blown its impact out of proportion.
Teachers in their first four years of experience would see their pay increase from $30,800 to $33,000. In their fifth to 11th years of employment teachers would get double-digit percentage raises. Teacher pay would level off at $50,000 a year after 25 years of experience.
Berger said there would be no change in the dollar amount allotted to employ teaching assistants. The Senate had proposed eliminating money for local school districts to hire 7,400 teaching assistants in all second- and third-grade classrooms. Funding for other education-related positions also would be eliminated. But about $65 million for teacher assistants that lawmakers said local school administrators have been shifting to fund teaching positions will be formally transferred to help pay for teacher raises.
"Should the local school districts determine that they need to move it back into TA allotment, they have the full flexibility to do that," Tillis said.
Medicaid eligibility will stay the same. The Senate had proposed eliminating Medicaid eligibility for more than 15,000 people. The program serves poor people and people with disabilities.
The state spends $3.5 billion annually to treat 1.7 million Medicaid recipients. Efforts to revamp the program to hold down costs were removed from the budget to be tackled later.
There are Medicaid cuts in the budget, including a 1 percent cut in provider reimbursement, said chief House budget writer Rep. Nelson Dollar, R-Wake.
The budget also puts $186 million into a reserve for Medicaid cost increases and includes $700 million in a savings reserve to cope with a program that has had almost annual overruns for several years, Tillis said.
"We're seeing lower and lower shortfalls, but we have to be prepared for that so the promises we're making in this budget continue to be fulfilled," he said.
McCrory spokesman, Josh Ellis, said in a statement, "there are several major issues that are being worked on, including Medicaid eligibility, to hopefully avoid a veto."
The budget also:
• Maintains funding for the public university system.
• Gives most state employees a $1,000 raise and five extra vacation days.
• Increases pay for Highway Patrol troopers by at least 5 percent.
• Creates a $10 million grant program to replace a 25 percent tax film credit, in line with a Senate passed a bill passed earlier in the session. The tax credit expires at the end of this year. Last year, $61 million was spent on the credit, according to the North Carolina Department of Revenue.
• Adds about $800,000 for vouchers for students to attend private or religious schools if the program survives legal challenges and is able to start distributing money this academic year.