House and Senate negotiators began to break their budget logjam Wednesday, clearing the way for negotiations on teacher pay and lottery money – and possible adjournment.
“Today was a good day,” said Senate President Pro Tem Phil Berger.
Negotiators met in a rare public meeting notable not only for its emerging consensus but for the absence of the rancor that marked recent exchanges.
The $21 billion budget has been the main sticking point between House and Senate, with both sides seeming far apart on revenues as well as spending on Medicaid and education.
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Wednesday’s public meeting followed private discussions between House and Senate leaders. Rep. Nelson Dollar, a Wake County Republican and lead House negotiator, appeared to set the tone. “Let’s meet in the middle,” he told negotiators.
In the end, that’s what began to happen.
A key difference was on Medicaid spending and how much to reserve for possible shortfalls. The Senate, for example, wanted to hold about $70 million more than the House for an expected shortfall in the health program for the poor. In the compromise, each chamber gave ground on its numbers.
Negotiators agreed to allocate $137 million to pay for Medicaid cost overruns in the prior year’s budget and put aside an additional $186 million to cover additional costs this fiscal year.
“We’re still concerned about it but ... we were willing to compromise,” Berger said.
Democrats were cautious about plans that still appear to be nearly $170 million apart.
“The attitudes are positive but the numbers don’t add up,” Sen. Joel Ford, a Charlotte Democrat, said later.
To be sure, sticking points remain.
The Senate has proposed giving teachers an average 11 percent raise – what lawmakers call the largest ever in North Carolina – though they would cut $223 million for teacher assistants, end tenure and cut the state Department of Public Instruction. The House proposes an average 5 percent raise, retains teacher assistants and maintains tenure.
Gov. Pat McCrory and House Speaker Thom Tillis have said they won’t agree to a plan that cuts teaching assistants.
“Teacher pay is probably the next step,” said Sen. Harry Brown of Onslow County, the Senate’s top negotiator. “And after teacher pay, things will probably start falling.”
The latest House compromise offer still includes a plan to double lottery advertising to spur sales and get $30 million in additional revenues. The Senate says it won’t agree to the move.
The Senate continues to insist on a measure in the budget to cut eligibility for thousands of elderly and disabled residents from Medicaid. The House says it won’t agree to the proposal.
The House wants to give most state employees a $1,000 pay hike plus benefits, and retirees would receive a 1.44-percent cost-of-living adjustment. The Senate proposed a $809 salary bump plus benefits and a lower adjustment for retirees.
Both sides had ridiculed the other over the budget.
Last week the House tried to sidestep the budget process by passing a scaled-down spending plan that included its proposal to raise teacher pay. Then on Monday, Senate Rules Chairman Tom Apodaca, R-Henderson, said the bill would leave the state with an unbalanced budget. He employed a rarely used parliamentary maneuver to send the bill back to the House.
“We’re serious about getting a budget done, and it’s time to stop playing games,” Apodaca told reporters.
Senate negotiators said they were surprised when House members came to their Wednesday morning meeting with a proposal that moved closer to their own.
“It was stuck yesterday when we left this building,” said Sen. Tommy Tucker, a Union County Republican and Senate negotiator. “We had no idea the House was coming with another offer this morning. The House came forward with a reasonable compromise that we had to take seriously.”
Tucker even suggested that Tillis’ U.S. Senate campaign had slowed progress on the budget. “It’s obvious the speaker’s been traveling a lot and we need his leadership,” he said last week. On Wednesday he credited Tillis’ presence and participation with helping lead to the breakthrough.
Tillis said there’s more work to do.
“If we continue to do these same kind of meetings every day, next week we get those other issues out there and vetted,” Tillis said.