Politics & Government

July 15, 2014

NC Senate moves closer to House positions in budget talks

The state Senate adopted the House position on state employee raises and offered 8 percent average raises for teachers and smaller Medicaid cuts.

Republican senators said Tuesday they would give teachers 8 percent rather than 11 percent raises and cut fewer elderly people from Medicaid in their latest state budget offer that moves Senate positions on contentious items closer to House preferences.

The new Senate proposal was the first major move in about a week toward finalizing a revised $21 billion state budget that is more than two weeks overdue.

“The Senate has tried to make a leap and come to a compromise,” said Sen. Harry Brown, a Republican from Jacksonville and a chief negotiator.

The Senate wanted average 11 percent raises for teachers that would come with major cuts to teacher assistants and elderly and disabled Medicaid beneficiaries. The House wanted more modest raises of 6 percent for teachers that would avoid the steep reductions in teacher assistants and Medicaid.

In its new proposal, the Senate agreed to just cut third-grade teaching assistants, instead of the previous proposal to cut both third- and second-grade assistants. . However, the Senate proposal would pay for the second-grade assistants with one-time money, meaning the legislature would have to agree to pay for them year by year if members wanted to keep them.

The Senate also agreed to give back more than $100 million in Medicaid cuts they wanted, reductions that would have removed more than 30,000 medically needy people, many of them elderly and in adult care homes, from the government insurance program for poor people.

The Senate agreed with the House position to give rank-and-file state employee raises of $1,000 plus benefits. Senators included a streamlined teacher salary schedule, which Gov. Pat McCrory wants, to replace the 39-step schedule.

Rep. Nelson Dollar, R-Cary, the chief House negotiator, said he appreciated the progress, but said some concerns remain. House negotiators are expected to make another offer of their own.

Though the Senate in its latest offer sharply reduced the people who would lose Medicaid, about 5,000 elderly people would still become ineligible under their proposal.

Brown said the Senate made a major concession on Medicaid eligibility, giving up savings of $105 million.

The Senate “gives more back to the House than we’re asking to keep,” Brown said. “I think we moved more on Medicaid than anybody thought we would.”

The House and Senate have other Medicaid differences to work out. The Senate wants a state Medicaid office independent of the state Department of Health and Human Services. Tuesday’s presentation was only about money, excluding the many policy issues inserted in the budget proposals.

Disagreements the past few weeks over Medicaid spending and teacher salaries raised the pitch of an intra-party Republican brawl, with some sharp barbs exchanged between Senate leaders and McCrory. Last week, Republican senators walked out of one budget negotiation and a House budget meeting was canceled after senators said they weren’t going.

McCrory last week said he preferred the House teacher raise of 6 percent and said in a statement he would veto a budget with 11 percent raises. On Monday, McCrory compared Senate leaders to Democratic U.S. Senate Majority Leader Harry Reid.

Senate leader Phil Berger, an Eden Republican, had lunch with McCrory and House Speaker Thom Tillis on Tuesday before the public presentation of the new budget offer.

In a statement, McCrory called the meeting a “positive dialogue.”

“However, we continue to have objections concerning the elimination of thousands of teacher assistants as well as cuts to core state services, including programs for the elderly, disabled and Alzheimer’s patients,” he said.

He mentioned an idea that Tillis has been floating, that the state set a baseline raise and let school districts decide whether to spend a portion of the money on bigger raises or on teacher assistants.

“We’re encouraged that both Speaker Tillis and Senate Education Chairman Jerry Tillman publicly indicated their willingness to consider this proposal,” McCrory said.

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