House, Senate agree to $21.74 billion budget target

After weeks of negotiations, N.C. House leaders agreed to a budget spending level that’s close to the 2.7 percent increase sought by the Senate and Gov. Pat McCrory.

According to McCrory’s office, legislative leaders agreed to set the total budget at $21.735 billion after a “breakfast meeting at the Executive Mansion.” That number equates to a 3.1 percent increase over the previous fiscal year’s budget.

The figure is $85 million more than the $21.65 billion target that Senate leader Phil Berger suggested several weeks ago, noting that the spending increase would represent population growth and inflation.

By settling on $21.735 billion, the House is agreeing to cut about $415 million from its original budget proposal. The Senate is agreeing to spend $265 million more than its original plan.

House leaders had said the additional spending was needed to catch up on critical government needs after years of cuts in the recession.

“This agreement is the result of ongoing dialogue during the last several weeks,” McCrory said. “We remain committed to working with the House and Senate to find common sense solutions that create jobs, strengthen education and fund critical infrastructure in North Carolina.”

The budget is still far from complete. Lawmakers must now work out how the $21.735 billion will be spent. Among the remaining sticking points: State employee raises and teacher assistants.

The House budget had a 2 percent raise for all state employees, while the Senate wanted to instead offer targeted raises for hard-to-fill positions. And the House wants to keep elementary school teacher assistants funded at current levels, but the Senate plan would cut thousands of positions to instead hire more teachers and reduce class sizes.

The legislature has a self-imposed deadline of Aug. 31, when the current temporary budget agreement will expire. It’s the second such “continuing resolution” since the last fiscal year ended on June 30, and a third extension is possible if no deal is reached.

In a blog post Tuesday morning, House budget writer Chuck McGrady of Hendersonville indicated that a spending target close to the Senate’s preference could make the House’s other priorities difficult to achieve.

“For the House, lowering the spending target means real cuts,” McGrady wrote. “For example, it would be nearly impossible to fund the teaching assistant positions or drivers education with a low number. State employees, teachers, and retirees expect pay raises after years of receiving no raises, but it becomes hard to fund any sort of across-the-board pay raise if the spending number is low.”

This story was originally published August 18, 2015 at 11:36 AM with the headline "House, Senate agree to $21.74 billion budget target."