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Senate, House leaders announce budget compromise

The following is a press release from the office of Senate President Pro Tempore Phil Berger

Raleigh, N.C. – Senate Leader Phil Berger (R-Rockingham) and House Speaker Tim Moore (R-Cleveland) held a joint press conference Tuesday to announce details of the more than $24 billion budget agreement reached between the state House and Senate.
The compromise budget maintains the responsible budget growth that has defined Republican fiscal policies since 2011 resulting in hundreds of millions of dollars in budget surpluses, despite Democrats predictions of deficits, and billions in savings reserves. Thanks to the last eight years of responsible budgeting decisions under Republican leadership, as well as well as a low-tax philosophy and pro-growth economic policies, North Carolina’s economy is booming. GDP, employment and per capita income have all grown faster than the nation and region.
Legislative leadership and budget writers have had multiple discussions with Gov. Cooper and his staff over the past two weeks in an attempt to come to an agreement on a compromise budget that the governor would sign. However, despite legislators requesting specific compromise proposals from Governor Cooper on multiple occasions via letter, phone, text message and at in person meetings, he has still not provided any specific proposals and has instead requested legislative leadership delay the budget past the start of the new fiscal year, further dragging out the process.
“Last week Speaker Moore and I met in person with Governor Cooper and presented him with our specific allocations for a number of major budget items and we have still not received any kind of counter-offer from him outside of unspecific generalizations,” said Berger. “We waited as long as we could but it is important that we have a budget passed before the end of the fiscal year to ensure that priorities like public schools and Medicaid transformation are properly funded. The governor has had two weeks to relay his specific priorities to us and has yet to do so. I do not have any confidence that delaying the budget past the new fiscal year as the governor asked us to do will now result in him doing so.”
Although he has not provided any specific details on his compromise proposals, Gov. Cooper has made it very clear that expanding Medicaid is his top priority. In an act of good faith, budget writers included a provision to hold a future special legislative session this fall just to discuss health care access, including Medicaid expansion, allowing the topic to have a full and open discussion.
Legislative leaders were very clear at the press conference that even though time is running short, they are still willing to work with Governor Cooper and change the budget if he presents legitimate counter-offer proposals.
Key provisions of the budget include:
In Salaries and Benefits –
  • Over the last five years, teachers have received a 20-percentage point pay raise while state agency employees have received a 7.6-percentage point pay raise. In that time, North Carolina’s teacher pay rankings have increased from 47th in the country to 29th in the country. We are now 2nd in the Southeast.
  • The Conference Report provides most state employees with a 5% salary increase by adding $220 million over the biennium. It is the largest salary increase in more than a decade.
  • Teachers will receive an average raise of 3.9% over the biennium. 
  • Increases the base teacher salary schedule for steps 16-20 by 1% in each year of the biennium.
  • Increases the base teacher salary schedule for steps 21-24 by 3% in FY 2019-20, and an additional 1% in FY 2020-21.
  • Increases the base teacher salary schedule for steps 25+ by 1.2% in FY 2019-20 and an additional .9% in FY 2020-21.
  • Provides teachers with 25+ years of experience a $500 bonus in each year of the biennium.  
  • Teachers have an annual raise built into their salary schedule and that is fully funded in this budget.
  • Because of teacher pay raises this decade, teachers have nearly $250,000 more lifetime earning potential.
  • The budget increases all levels of the principal salary schedule and increases principal merit-based bonuses.
  • Provides salary supplements of at least $7,500 annually for prison employees in facilities with the highest vacancy rates.
  • Creates a new incentive structure to recruit talented principals to low-performing schools. Participating principals will receive a $30,000 annual salary supplement for three years.
  • Provides an additional raise to SBI/ALE agents by tying their salaries to the highway patrol salary schedule.
In Education –
  • Senate Republicans believe that every child deserves the opportunity to create his or her own success regardless of income, ZIP code, or color.
  • Total commitment to K-12 capital funding for new schools and repairs is $4.4 billion over 10 years: $1.5 billion from the State Capital and Infrastructure Fund; $1 billion from the Public School Capital Fund; and $1.9 billion in needs-based capital funding.
  • Increases funding for public education by more than $1.43 billion over two years.
  • Fully funds K-12, community college, and public university enrollment growth.
  • Invests more than $91 million in school safety measures to protect children in schools, including $52 million in new recurring funding for additional mental health professionals and school resource officers.
  • Allocates an additional $43 million over the biennium for schools to hire new mental health personnel.
  • Invests an additional $12 million recurring for textbooks and digital resources.
  • Adds $15 million in new funding for classroom supplies, and provides $150per teacher in the first year and $200 in the second year for teachers to purchase classroom supplies.
  • Total Community College Capital Funding over 10 years – $400 million
  • Fully funds the request from community colleges for workforce development training programs.
  • Increases funding for the community colleges career coaches program.
  • Provides $500,000 recurring to the North Carolina Center for the Advancement of Teaching to support professional teacher development.
  • Establishes financial literacy courses for students in high school and provides $1 million for teachers to receive professional development to teach these courses.
  • Provides funding for a summer reading camp pilot program to assist with literary instruction, consistent with the Excellent Public Schools Act of 2019.
  • Provides $3 million to provide free meals for students currently eligible for only reduced-price lunches.
  • Fully funds N.C. A&T’s doctoral program.
  • Commits to $32 million over four years to Elizabeth City State University for a new library.
  • Continues the commitment to N.C. Promise, giving students an opportunity to attend three state universities for only $500 a semester.
  • Provides $8 million over the biennium to the Western School of Medicine.
  • Provides $8 million over the biennium to the Southern Regional Area Health Education Center.
In Health and Human Services –
  • Appropriates almost $22 million over two years to fund 1,000 slots on the Intellectual/ Developmental Disability (IDD) Medicaid Program waitlist. This program provides personal care services and other in-home assistance for people with severe intellectual developmental needs.
  • Attempts to retain group home workers who care for people with mental health needs with a $16 million wage increase. 
  • Provides $15 million to increase access to substance abuse treatment and recovery options and to fight the opioid epidemic.
  • Spends $140 million to fill in the budget hole left by the federal government’s reduction in funding for N.C. Health Choice.
  • nvests $4 million over the biennium to the Smart Start program to improve early childhood literacy, enhance parenting skills, and increase access to quality child care centers.
  • Allocates $4.5 million over two years for the Rural Health Loan Repayment Program which recruits doctors, dentists, physician assistants, nurse practitioners, and certified nurse midwives into rural areas.
  • Appropriates nearly $5 million for staffing and operating costs to open Psychiatric Intensive Care Unit beds in Broughton Hospital.
  • Allocates $13 million over the biennium to family services including improving the quality of foster care in North Carolina.
  • Provides over $2 million for prescription drug assistance programs that serve uninsured North Carolinians. 
  • Expands North Carolina’s statewide tele-psychiatry program and also establishes a telehealth pilot program aimed to improve health outcomes in Robeson, Bladen, Columbus, and Scotland Counties. Robeson County has the worst health outcomes in North Carolina.
  • Funds an additional $2.6 million across the biennium to safety net clinics, inclusive of community health centers and free and charitable clinics.
  • Redirects over $218 million in non-recurring funds from the Medication Transformation Fund for start-up costs needed to transition to Medicaid Managed Care. Start-up costs include patient enrollment broker contracts, provider credentialing, data analytics, and other program design components.     
  • Provides over $18 million to residential facilities to offset the cost of caring for low-income residents, in addition to assisting these residents with daily living expenses.  
In Justice and Public Safety –
  • Provides $70 million over the biennium to implement “Raise the Age”
  • Allocates $6 million over two years to clear the rape kit backlog
  • Implements Standing Up for Rape Victims Survivor Act to ensure no backlog in the future.
  • Appropriates $477,000 to the Human Trafficking Commission, plus $1.5 million to the State Bureau of Investigation (SBI) for human trafficking investigations.
  • Implements recommendations from the Human Trafficking Commission.
  • Increases compensation for private assigned counsel for indigent defendants.
  • A fair justice system requires competent legal defense for everybody.
  • Expands the Criminal Justice Fellows Program by providing $1 million over biennium.
  • Funds 8 new SBI agents to assess threats against schools and houses of worship.
  • Allocates $2 million for new prison security measures, including man-down technology and stab resistant vests.
  • Increases funding to the NC Innocence Inquiry Commission at $480,000.
  • Creates a pilot project to establish a Quick Response Team to address the needs of opiate and heroin overdose victims who are not getting follow-up treatment.
  • Provides funds for the opening of a long-term care facility at Central Prison.
  • Invests $1 million in reentry programs to reintegrate non-violent offenders.
  • Goal of criminal justice system is to reduce recidivism.
  • Funds National Guard Challenge Academies for at-risk youth.
In Taxes and Economic Development –
  • Responsible Republican tax and budget policies have created a boom decade in North Carolina. The tax provisions in this budget continue that trend.
  • The budget modifies some provisions from the Tax Reduction Act of 2019, which passed the Senate.
  • The standard deduction will increase to $21,000, which marks a $15,000 increase since Republicans took control of the General Assembly.
  • As a reminder, Republican tax cuts have reduced the effective income tax rate for low- and middle-income earners more than any other group.
  • In fact, the share of income taxes paid by the highest earners has increasedunder Republican tax policies, while the share paid by low-income earners has decreased.
  • The budget also reduces the franchise tax rate to $0.96 per $1,000 of net worth.
  • Unlike other taxes, the franchise tax is calculated based on a business’s capital, not income. This creates a disincentive to hire new employees and buy new equipment.
In Agriculture and the Environment –
  • Clean water and pristine natural resources are important for everybody in our state, regardless of political affiliation. It is state government’s responsibility to maintain and improve these resources.
  • Provides more than $43 million over two years for the creation of new State and local parks and for the preservation of North Carolina’s natural treasures.
  • Allocates more than $39 million over the biennium to the Clean Water Management Trust Fund for land preservation and for projects that will help North Carolina maintain clean water resources for generations to come.
  • Consistent with the Senate Republican pledge to support the Historical Commission recommendations, provides $2.5 million to fund a monument on the Capitol grounds to highlight the contributions of African Americans to our state.
  • Provides a $1.5 million challenge grant for the North Carolina Freedom Project for the creation of “Freedom Park” in downtown Raleigh.
  • Provides funding for the creation of two new State Parks, the Pisgah View Park and the Wilderness Gateway Trail.
  • Provides $18 million and establishes a framework for the creation of the viable utility reserve, which will provide grants for distressed water and wastewater systems throughout North Carolina. This will be the first targeted program ever to address failing and distressed systems.
  • Extends the highly successful Dry Cleaning Solvent Act cleanup program for another 10 years.
  • Provides $500,000 to the Town of Maysville to replace their drinking water groundwater well, which was recently found to contain PFAS.
  • Provides additional funding to the Clean Water and Drinking Water State Revolving Funds, which is a federal-state partnership to help ensure safe drinking water. The state funds will maximize federal dollars for the State’s critical water and wastewater infrastructure.
  • Provides $2 million total to match federal funding for the Jean Preston Oyster Sanctuary.
  • Provides $10 million for the operation of a new Ag Sciences Center.
  • Provides $250,000 of recurring funding and $50,000 of nonrecurring funding to continue efforts to restore and protect Hemlock in western North Carolina.
  • Provides $450,000 for cost share assistance to swine farmers to install equipment to produce biogas. Smithfield has proposed this initiative as a mitigation option for hog farm waste.
In Transportation –
  • People are moving to North Carolina in droves, and state government must make investments to ensure infrastructure keeps up with growth.
  • Increases funding for Strategic Transportation Initiatives by $20.9 million in the first year and $109.5 million in the second year. This will bring the net appropriation level to almost $3 billion over the biennium to fund new transportation projects across a growing North Carolina.
  • Increases the General Maintenance Reserve within the Highway Fund by more than $165 million over the biennium to help improve Department of Transportation (DOT) response to storm events and other maintenance needs on roads across the state.
  • Invests more than $23 million over the next two years in railroad infrastructure, including improving commuter rail, train stations, and locomotives.
  • Appropriates an additional $100 million over the biennium for improvement to airports across North Carolina.
  • Invests almost $530 million over the next two years in the Bridge Program to help maintain, repair, and replace bridges across North Carolina.
  • Provides funds for the previously approved move to a new DMV headquarters in Rocky Mount.
  • Allocates $11 million over two years to the North Carolina Ports Authority to raise power lines to allow bigger vessels to come into the Port of Wilmington and keep North Carolina competitive in the shipping industry.
  • Provides $7.4 million in recurring Powell Bill funding to fund the building and maintenance of roads in small towns and cities.
Elsewhere –
  • Adds $710 million to the Savings Reserve Fund. State economists estimate the fund requires at least $2.6 billion before the next recession.
  • Provides $15 million recurring each year for the expanded broadband capabilities in rural areas through the GREAT Program established by the General Assembly in 2018, committing to $150 million in funding over the next decade.
  • Provides $1.1 million to the State Board of Elections to continue to implement North Carolina’s voter ID requirements pursuant to the voter-supported constitutional amendment
  • Provides $20,000,000 over the biennium for the Workforce Housing Loan Program to help develop multi-family affordable housing units across the state.
  • Provides funding to create a suicide prevention program for active duty military and veterans. These funds will be used to increase awareness about veteran mental health issues and establish or support treatment programs for active duty personnel and veterans.
  • Provides $2 million to sustain and maintain the state’s military programs and activities by providing grants for local communities or military installations, updates to strategic planning, federal advocacy, and identification or measures to increase the military value of installations.
  • Expands the type of cancers covered as occupational diseases for firefighters’ death benefits to include oral cavity and pharynx cancer.
  • Provides $1 million for the continuing upgrade of statewide cybersecurity capabilities.
  • Provides approximately $3.6 million in directed grants to various Fire and Rescue entities throughout the state to support their work
  • Provides approximately $1.2 million in directed grants to various local governments throughout the state to provide funding assistance for needed projects and improvements
The full budget agreement will be posted to the North Carolina General Assembly website at later this afternoon. 

EdNC staff reporting relies on staff, interns, and columnists.