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McCrory budget focuses on schools, efficiency

By Jim Morrill and John Frank
jmorrill@charlotteobserver.com

RALEIGH In what he called a “tough” budget, Republican Gov. Pat McCrory released a spending plan Wednesday that focuses on education and government efficiency while restoring some cuts from recent GOP budgets.

The $20.6 billion budget calls for more teachers but fewer teacher assistants. It would close five rural prisons, transfer more than 200 positions from the Attorney General’s office and give teachers and other state employees a 1 percent pay raise.

It would keep money for Charlotte’s light-rail extension and restore funding for drug treatment courts but cut support for Pineville’s James K. Polk historical site.

And it would give $10 million to victims of the state sterilization program.

“We have a strong foundation,” McCrory said in presenting his first budget. “But our foundation has some cracks in it. Our goal is to start filling in those cracks.”

The 323-page plan is the first step in a long process. Now it goes to the General Assembly, which begins its review Thursday and where early reviews were favorable.

House Speaker Thom Tillis, a Cornelius Republican, called it “a positive first step in a long budgeting process.” Senate President Pro Tem Phil Berger of Eden praised the governor’s plan and said, “(We) feel confident we will share common ground on many important priorities.”

Democrats saw it differently.

“This budget is really a smokescreen for an assault on the middle class,” said House Minority Leader Larry Hall of Durham. “This budget cuts jobs and it cuts jobs in rural North Carolina in particular.”

Hall said the budget also gives a tax break to “the wealthiest of the wealthy.”

That was a reference to the estate tax, which McCrory’s budget would repeal at a cost of $109 million over two years. Lawmakers say only 23 estates paid the tax last year.

Senate Minority Leader Martin Nesbitt of Asheville said the budget “hurts North Carolina.”

Not only would the prison cuts cost hundreds of jobs in counties such as Wayne and Duplin, but $130 million would go from the Golden LEAF Foundation to the general fund. Funded in 1999 by the federal tobacco settlement, Golden LEAF is designed to help rural economies.

The budget also would change the way nonpartisan judicial elections are financed by removing state money from the pot that funds them.

In touting his budget, McCrory took particular pride in restoring the state’s savings account, known as the rainy day fund. Projecting economic growth at 3.6 percent in the next fiscal year, he would put $813 million in the fund over two years.

McCrory would invest $77 million over two years to modernize state information systems, which he has often criticized. “Our information systems,” he said, “are totally broken in state government.”

He would also require state departments and agencies to cut their budgets by up to 3 percent.

Here’s a closer look at the governor’s budget:

•  Education. More than $11 billion – 56 percent of the budget – would go to education. McCrory would hire 1,800 more teachers and provide $179 million for textbooks and other supplies.

McCrory would allocate another $52.4 million for at-risk 4-year-olds in pre-K programs.

He would save $117 million a year by focusing teacher assistants on kindergarten and 1st grade, though school administrators would have the option to use them in 2nd and 3rd.

•  Colleges. Community colleges would get $40 million less over two years, reflecting a decline in enrollment. However, the budget would spend $28 million over two years on equipment for the schools.

For the University of North Carolina System, it would keep tuition the same for in-state students but raise it for those from outside the state. The budget would raise $48 million by hiking out-of-state tuition 12.3 percent at the six biggest campuses and 6 percent for others.

•  Public safety. McCrory was a longtime supporter of Drug Treatment Courts in Charlotte and elsewhere before they were cut last session by legislative Republicans. His budget would restore them at a two-year cost of $7.2 million.

Citing a declining prison population, McCrory would close five prisons, most in rural eastern counties, saving $54 million but costing hundreds of jobs. He acknowledged that would be painful.

“We feel we’re making the best budget recommendation for all of North Carolina,” he said.

•  Attorney General’s office. The budget would move 210 attorney and staff positions – about half the total – to agencies such as Health and Human Services for which they do most of their work. Budget writers say the change would allow the attorney general’s office to focus on its “core mission.”

The budget only briefly alludes to possible tax reform, which the governor and Republican legislators have promised to push. The budget says any tax reform would be revenue neutral.

Morrill: 704-358-5059
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