NC budget agreement reached on worker pay, spending targets

RALEIGH – North Carolina budget negotiators said Wednesday they’ve reached big milestones on a state government spending plan that’s two months late, including a tentative agreement on state employee and teacher pay.

But it won’t be enough to avoid another temporary spending extension, with the next one stretching into mid-September. The two-year budget was supposed to be finished by July 1.

House and Senate Republican leaders confirmed spending targets in broad government agency categories have been finalized, such as for public education, health and human services and public safety. There’s also still about $120 million unspoken for so the top negotiations can work out any nagging differences, according to the proposal. But the targets, reached Tuesday, opened the door for chairs of subcommittees to begin meeting in earnest.

The two chambers already had agreed last week that overall spending would be $21.74 billion this year.

“A lot of progress has been made in the last 72 hours,” House Speaker Tim Moore, R-Cleveland, told colleagues on the House floor. “The good news is it looks like we’re getting close.”

Budget writers Sen. Harry Brown, R-Onslow, and Rep. Chuck McGrady, R-Henderson, also said in separate interviews that agreements have been reached on salaries.

The deal would give all state workers and teachers a $750 bonus around Christmas, and teachers also would receive their experience-based salary increases, according to another document outlining the agreement obtained by The Associated Press.

“The salary piece has all been worked out,” Brown said.

McGrady cautioned this and other agreements are “in pencil” essentially until the chambers formally vote on a final budget. But the new agreements appeared intact after House and Senate Republican caucuses met privately Wednesday afternoon.

“Everything is tied to everything else,” McGrady said, but “that is the right number right now.”

The deal also would set aside $30 million over two years to raise salaries in the community college system, and $37.5 million over the same period would go into a “salary adjustment fund” sought by Gov. Pat McCrory to raise salaries in hard-to-staff or high-demand positions, according to the agreement. State troopers and correctional officers also would see salary help.

Previous temporary spending agreements approved earlier this summer already had raised minimum salaries for early-career teachers from $33,000 to $35,000. That stays in place, but the actual base salaries for the other five experience-based levels would not change, the document says.

The House budget approved in May had proposed a 2 percent across-the-board raise for state employees and most teachers, but such an increase looked unlikely as the two chambers and McCrory agreed last week on spending $420 million less this year compared to the House budget. The Senate’s budget and McCrory’s proposal pushed the salary adjustment fund idea.

North Carolina Association of Educators President Rodney Ellis said the one-time bonus for most teachers shows the General Assembly “has no long range plan to address the impending teacher shortage crisis and the ability to recruit and retain quality educators” to classrooms.

No decision has been made on whether state retirees will receive a cost-of-living increase this year, Brown said.

Despite a $445 million surplus from last year, budget negotiations have been hampered since late June by large policy differences and the inability of both sides to agree on a bottom-line spending number. The logjam eased slowly as Senate Republicans agreed in early August to separate a Medicaid overhaul proposal and economic incentives from the budget process.

The two chambers still differed Wednesday on the fate of funding earmarked to pay several thousand teacher assistants in public schools.

The first temporary spending plan to keep government operating during the delays was to expire Aug. 14. A second similar “continuing resolution” is set to expire Monday. Brown and Moore said a third such a resolution would be voted on Thursday and expire Sept. 18. McCrory, a Republican, would be asked to sign the third extension and any final budget into law.

At a glance

Here's a quick look at spending amounts by category agreed upon by House and Senate negotiators this week and incorporated in their proposal to spend $21.74 billion during the fiscal year that ends next June 30. The totals will not add up to the bottom-line number due to other small adjustments.

Public education (public schools, University of North Carolina, community colleges): $12.05 billion

Health and Human Services (Medicaid, public health, mental health): $5.12 billion

Justice and Public Safety (courts, prisons, State Bureau of Investigation): $2.44 billion

Natural and Economic Resources (commerce, environment, agriculture): $372 million.

General Government (Cultural Resources, state auditor, revenue, small agencies): $425 million.

Debt Service: $715 million.

Additional salary and benefits: $349 million.

Reserve to handle unresolved budget matters: $121 million.

Capital projects: $30 million.