GOP leaders agree on $20.6 billion NC budget

Tags: , , , , ,

Submitted: Mon, 07/22/2013 - 12:09pm
Updated: Tue, 07/23/2013 - 12:32pm

RALEIGH, N.C. (AP) – Leaders in the North Carolina House and Senate announced that they have reached agreement on a $20.6 billion budget that will end teacher tenure and allow taxpayer money to be spent for private school tuition.

Highlights of the budget negotiated by the Republican majority were issued in a news release. The actual appropriations bill was not expected to be made available to the public until late Sunday night.

Both chambers have previously passed their own spending plans, but Republican leaders wrangled for weeks to come to a consensus even as the July 1 start of the 2013-2014 fiscal year came and went.

Republicans took over the General Assembly in 2010 for the first time in more than a century, but did not cement full control of state government until GOP Gov. Pat McCrory took office in January.

Lawmakers are expected to vote on the compromise budget in the coming week.

The budget increases overall state spending by 2.5 percent while instituting tax cuts for corporations and individuals. The plan scraps the longstanding teacher tenure system in favor of employing educators on contracts that are renewed based on performance reviews. The budget would also allow families that meet income guidelines to get state money to pay private school tuition starting in 2014.

“Republicans in the General Assembly have produced a state budget that reduces taxes and right-sizes state government,” said House Speaker Thom Tillis (R-Mecklenburg), according to the release. “This budget is another crucial step in putting North Carolina’s fiscal house in order.”

State spending on Medicaid is increased by $1.5 billion to cover what Republicans term as cost overruns. A special provision would allow the McCrory administration to develop a Medicaid reform plan in the coming months.

The budget also supports McCrory’s plan for overhauling the North Carolina Highway Trust Fund, which prioritizes and pays for transportation infrastructure projects over the next 10 years.

The plan restores funding that had been previously cut for 69 positions within the State Highway Patrol, as well as another 22 magistrates and 175 probation and parole officers.

The budget meets the state’s obligation to fund the state retirement system and state health plan, while providing state employees with 5 additional days of leave. The release makes no mention of any raise for state employees, whose salaries have remained largely stagnant for years.

The release also said living victims of a state-sponsored eugenics program that ended in the 1970s will receive a one-time compensation payment, but it did not say how much that payment will be.

North Carolina forcibly sterilized about 7,600 people who the state deemed feeble-minded or otherwise undesirable between 1929 and 1974. Some of the victims were as young as 10 and chosen because they were promiscuous or did not get along with their schoolmates.

While many states had similar eugenics programs, most of them were abandoned after the practice was associated with the Nazis after World War II. But North Carolina actually expanded its program after the war.

A group set up to help North Carolina victims estimated up to 1,800 were still living last year, though it had only verified 146 of them.

The Legislature has debated whether to compensate eugenics victims for years, but the proposal didn’t gain much traction until 2012. A bill to pay each victim $50,000 passed the House with the support of then-Democratic Gov. Beverly Perdue and Speaker Tillis, but stalled in the Senate.

The budget also eliminates state funding for the nonprofit Rural Economic Development Center, which was stung by a negative audit last week, triggering the resignation of its long-time president. In its place, the legislature is creating a new division within the N.C. Department of Commerce to focus on improving services to the state’s rural counties.

“Together, members of the House and Senate have carefully crafted a plan that smartly invests in key priorities like education and public safety while fulfilling our shared commitment to fiscal responsibility and accountability in state government,” said Senate leader Phil Berger (R-Rockingham), according to the release.

Alexandra Forter Sirota, the budget and tax director at the left-leaning N.C. Justice Center, saw it differently.

“Lawmakers chose to drain available revenues by $524 million over the next two years through an ill-advised series of tax cuts that primarily benefit the wealthy and profitable corporations,” Sirota said in a statement issued Sunday by the advocacy group. “This revenue loss isn’t just a number on a piece of paper – it means fewer teachers in more crowded classrooms, higher tuition rates and elevated debt load for families, scarcer economic development opportunities for distressed communities and longer waiting lists for senior services.”


Associated Press writer Jeffrey Collins in Columbia, S.C., contributed to this report.


Follow AP writer Michael Biesecker at

(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)


  • Vog46 says:

    It “right sizes” state government with a 2.5% increase in spending?
    Then cuts revenue by $2B over 5 years?

    They should have stuck to vaginal wands……..

    Funny that we have a Legislature that is comprised of gynecologists……


  • SurfCityTom says:

    did you miss the Wall Street Journal article in which the Governor and Legislature were praised for showing some fiscal responsibilty and steering the state away from a fiscal downfall off some cliff?

    Meanwhile, someone ought to give Puffy Saffo a couple of the articles concerning Detroit’s fall into bankruptcy. He & the Council should do some required reading.

  • Teach456 says:

    All teachers or anyone connected to one….remember who took our tenure and masters pay when you vote tomorrow. Vote all of the sorry SOBs out and make sure the new ones know that if it isn’t reversed, they will go the same way. Tenure was created for educational freedom and protection from idiotic administrators and parents that can not accept that their kid is a moron and/or troublemaker. If they take this away, 2018 will be the year that education died in N.C. Believe it….it’s already on its deathbed….

  • Vog46 says:

    The biggest problem facing most states is the least of NC’s problems and the at is the pension fund. It has always ranked in the top 10 for being fully funded. Retiree BCBS is another story but thankfully its secondary insurance to Medicaid.
    As for Wilmington? I never felt that it was in bad shape financially.
    As far as the CC is concerned we have two hotels going up now with a CC hotel possibly being built in the future. According to Council this will INCREASE the ROT fund for the CC.
    Will it? Maybe, maybe not but Council is counting on that happening


  • SurfCityTom says:

    there was a report out about 18 to 24 months ago which noted state employee pension fund was underfunded by about $150 million and the employee health benefits fund was underfunded by around $200 million.

    Seems Bev and her predecessor were deferring deposits to allow a balanced budget with continued give away spending.

    And that is why the state is not encouraging older employees, with higher salaries and sufficient years for a pension, to retire and make way for younger, lower paid employees.

  • SurfCityTom says:

    you might want to check your numbers on the pension fund. The Treasurer just got smacked down, this week, for a proposal to shift investment policies to more “dicey” and risky investment options.

    If you recall, the state hired a new investment manager, at a tune of $330,000, during Smiley’s last year in office. He has not been able to “wheel and deal” due to the restrictions placed on how pension funds can be invested.

    I don’t believe the pension fund has benefited from the market changes as private sector investments have.

  • Vog46 says:

    You know better……..

    The stock market has risen to record highs making the pension fund 100% funded I believe. You can thank the Democratic State Treasurers for that – and indeed, unlike their bosses (Sleasely and Smiley) they did a great job.
    BCBS is another thing altogether..


Leave a Reply