GOP leaders tout budget deal with 7 percent teacher raise

07/29/2014 7:26 PM

07/30/2014 8:16 AM

North Carolina teachers would get a 7 percent pay raise and teacher assistants would keep their jobs under a budget outlined Tuesday by Republican legislative leaders.

The budget, expected to be voted on this week, also would boost pay of starting teachers to $35,000 over two years and give most state employees a $1,000 raise and five additional vacation days.

But the state also would end its current film incentive program and spend just a fraction of what it did last year to lure movies and television shows.

Speaking to reporters, House Speaker Thom Tillis and Senate President Pro Tem Phil Berger offered the broad outlines of a budget agreement. Details are not expected to become public until Wednesday.

Democrats, meanwhile, criticized what they called the “backroom deals” that led to the agreement and the speed with which it appears to be moving. Berger said senators could vote Thursday, a day after seeing the final $21.25 billion proposal.

And it’s unclear what Republican Gov. Pat McCrory would do. The governor has said he could support a teacher raise of 6 percent, but no higher. Berger said he and Tillis discussed the budget with McCrory over dinner Sunday.

“I would say he expressed some concerns. We’ve tried to address those concerns,” Berger said. “I think our members feel that what we have is a very positive overall package. We’re optimistic that the governor will see that as well.”

“Hopefully we can secure the governor’s support for a good budget,” Tillis added.

A McCrory spokesman was cautious.

“There are several major issues that are being worked on, including Medicaid eligibility, to hopefully avoid a veto,” McCrory spokesman Josh Ellis said. “We appreciate the ongoing dialogue.”

Earlier, McCrory and Tillis had rejected a Senate budget proposal that would have removed thousands of people from Medicaid in an attempt to control the spiraling costs of the program.

46th to 32nd in teacher pay

Berger and Tillis outlined a package that would:

• Move North Carolina from 46th in national teacher pay rankings to 32nd, with an average raise of $3,500 per teacher. It would also replace the current 37-step pay schedule with a six-step system.
• Discontinue a program that offers supplemental pay for teachers with master’s degrees, though those who already have a degree or who have started coursework toward one would continue to benefit.
• Maintain funding for the University of North Carolina system.
• Preserve current levels of eligibility for Medicaid benefits.

Tillis said the proposal also includes nearly $900 million in reserves. But neither he nor Berger mentioned the latest legislative staff estimates that last year’s tax cuts will cost $680 million this year, 43 percent more than originally projected.

Rep. Nelson Dollar, a Wake County Republican and lead House negotiator, said pay raises would be funded in part through “economies and efficiencies” in education spending and reductions in Medicaid spending, including a 1 percent cut in reimbursement rates to health care providers.

But Alexandra Sirotta, director of the progressive Budget & Tax Center, called the proposal “unsustainable and fiscally irresponsible.”

“Budget writers ignored the state’s revised revenue estimates, which show that the tax cuts passed last year are costing the state much more than lawmakers previously claimed, while primarily benefiting wealthy taxpayers and profitable corporations, not average people,” she said.

The teacher pay changes also could meet resistance, including from some teachers.

“The devil’s in the details,” said Mark Jewell, a vice president of the N.C. Association of Educators, who added that the proposal would give smaller raises to teachers’ support staff.

“The budget proposed today,” he said, “does not fulfill the promise to North Carolina’s public school children.”

Film credits become grants

Lawmakers also proposed replacing the state’s current film incentive program with a grant program.

Film production companies currently can get a 25 percent credit up to $20 million on qualifying expenses. Last year the state gave out $61.2 million in credits, according to the Commerce department. The proposed budget has no credits, but has grants totaling $10 million.

The legislature’s fiscal staff concluded that the credit creates “a negative return on investment.” But supporters say it boosts the economy with more than 4,000 full-time jobs and thousands of part-time jobs.

So far this year, the state film office reported, North Carolina has seen $268 million in estimated direct spending by the industry and nearly 19,000 jobs.

“How can we ignore those kinds of numbers and that kind of impact for North Carolina?” said Rep. Susi Hamilton, a Wilmington Democrat and outspoken advocate of the credit. “Leadership and the governor’s office know that $10 million won’t come anywhere close to preserving 4,000 jobs.”

McCrory has proposed a system of tax breaks more closely tied to film-related jobs and specific expenses.

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