The House and Senate tentatively approved a $21.4 billion budget Monday night that requires no tax increases, but includes modest pay raises for teachers and most state employees and a hefty $857 million in borrowing for construction projects.
The spending plan, which comes a week after the start of the fiscal year, is 3.4 percent higher than last year's $20.7 billion budget, but ends several years of much larger year-to-year budget growth.
The vote was 97-21 in the House, with a majority of Republicans in support, and 34-16 in the Senate in a more party-line vote. Democrats control both chambers. The budget will need to be voted on a second time by both chambers today before it can be sent to Gov. Mike Easley for his signature.
How much for pay raises?
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Teachers, UNC professors and community college instructors would receive an average raise of 3 percent. All other state employees would receive the greater of 2.75 percent or $1,100. Retirees would receive a 2.2 percent cost of living increase. Employee associations had sought more, particularly teachers, who praised Gov. Mike Easley's call to give them a 7 percent raise. Legislative leaders said there wasn't enough money, and noted that teachers and state workers are getting better raises here than just about anywhere else in the Southeast.
The Senate had offered Easley budget language that would allow him to revisit teacher salaries if the state's fortunes improved over the next four months, but House leaders kept it out of the budget. They said it made no sense when Easley was already urging lawmakers to cut spending as the economy worsens.
Why so much borrowing?
House and Senate leaders will have authorized $857 million in borrowing – much of it for new buildings on UNC campuses. (The budget also has roughly another $105 million in direct spending on construction projects.) The legislative leaders say the construction, which would be let over several years, could provide an economic boost. Plus they say with construction costs rising, the sooner projects start, the better.
Republicans have been concerned about the level of borrowing, particularly without voter approval.
Other budget highlights
It expands four prisons, creating 1,500 new beds for a system that is currently telling counties to keep convicted felons in jail cells until space opens up. It also includes $10 million for gang prevention programs, which may keep some teenagers out of the prisons down the road.
In response to the two high-profile killings of UNC Chapel Hill student body president Eve Carson and Duke University graduate student Abhijit Mahato, it includes money to help probation and court officials keep track of those who have violated probation. A tracking system pilot project would get $5 million, and the Correction Department would receive $2.5 million to improve its probation supervision.
It makes steep cuts – roughly $85 million – in mental health community support services, which have squandered about $400 million, audits show.
It includes $600,000 for sheriffs to participate in federal illegal immigration enforcement.
Rape victims would no longer have to pay for forensic exams. The budget includes $1 million to cover the cost.