N.C. House leaders Tuesday rolled out a plan to boost teacher pay by an average of 5 percent. But their plan to help pay for it by doubling the advertising budget for the N.C. Education Lottery raised immediate questions.
The plan, part of the House budget proposal, is similar to Gov. Pat McCrory’s proposal, with the biggest raises going to early career teachers. Unlike the Senate budget, which touts raises that could average 11 percent, it doesn’t require teachers to surrender tenure to get raises. Instead, those who have it would keep it while new hires wouldn’t get it.
The state House budget exposes the wide gulf between House and Senate Republicans on how to pay for state priorities.
Besides education, the other biggest difference is over Medicaid, the government insurance program for poor children and their parents, and elderly, blind and disabled people.
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The House budget doesn’t sacrifice teacher assistants as the Senate plan does. And it eliminates a controversial “25 percent plan” approved last year that ordered school districts to offer four-year contracts and small raises to a limited number of qualified teachers if they’ll give up tenure.
House Speaker Thom Tillis, R-Mecklenburg, said the House will vote on its budget this week in hopes that members can hash out differences with the Senate and have a 2014-15 budget approved next week.
Tillis said quick approval lets school districts plan for the August opening of classes and gives clear answers about what teachers can expect to earn. And if the House plan prevails, he said, teacher assistants wouldn’t have to worry about layoffs.
The tradeoff? Republican House leaders who say they never would have launched the lottery in the first place want to step up advertising in hopes that gamblers will provide an additional $106 million for schools – even as the ads warn of the astronomical odds against winning big.
“We can’t unring that bell,” Tillis said of legalized gambling. But he said putting more money into classrooms delivers on the original promise of the lottery.
Some House members questioned the validity of the projections and the wisdom of tying teacher raises to increased gambling.
“I do feel uncomfortable rolling the dice and betting on money that may not materialize,” Rep. Debra Conrad, R-Forsyth, told the House Education Appropriations Committee, echoing concerns raised by two Democrats on the panel.
The lottery has long been controversial, with some opposing it on principle and others asking why it hasn’t prevented education cuts and teacher pay freezes. And as one representative noted, many see the lottery commercials as just plain obnoxious.
The Rev. Mark Creech, executive director of the Christian Action League, said he was “saddened” by an attempt to increase teacher pay “that rides on the backs of people’s addiction.”
The House plan raises the 1 percent cap on lottery advertising to 2 percent. With lottery revenue already coming in over projections and gambling expected to rise with more ads, the House plan calls for almost $190 million more in lottery spending than the two-year budget approved last summer, for a total of roughly $658 million in 2014-15.
That money is split among classroom teachers, prekindergarten, school construction, digital learning, college scholarships and financial aid for low-income students.
The House budget adds $160.9 million in lottery money for teacher pay, for a total of $381.5 million. It also includes a $49.2 million increase for prekindergarten and $11 million for textbooks, while reducing lottery money spend for technology and a reserve fund for financial aid.
Alice Garland, executive director of the Education Lottery, said Tuesday her agency stands ready to crank up an ad campaign if the plan passes both houses.
“I’m not saying it’s going to be easy, but we believe that we can hit that target,” Garland said.
But she said she believes the current ads are candid about odds and payoffs. “I think that word is in the eye of the beholder,” she said of the demand for more honesty.
Rep. Paul Stam, R-Wake, said he’d prefer to budget based on actual lottery revenue, rather than projections. But he and other House members noted that all budgeting is based on revenue forecasts.
“The teacher raises are not dependent on that prophecy being fulfilled,” Stam said.
The House and Senate differ greatly on the state Medicaid program’s future and how much the health services will cost.
The House did not include Senate-proposed cuts to thousands of aged, blind, disabled and medically needy Medicaid beneficiaries.
While the Senate would add $206 million to the Medicaid budget to account for program growth and budget cuts that haven’t been achieved, the House creates a $117 million Medicaid reserve fund that the state budget office can tap into if program costs again outrun expenses.
The Senate, frustrated with the state Medicaid office operations, wants to break it away from the state Department of Health and Human Services. It wants the state to devise a plan to convert its Medicaid program to managed care.
The House keeps the state Medicaid office in DHHS.
The House budget includes $1 million for Medicaid changes, but Rep. Nelson Dollar, a lead budget writer, said the House would push forward with a proposal to form accountable care organizations, or ACOs. McCrory, the N.C. Medical Society and the N.C. Hospital Association prefer the ACO option.
The House proposal for ACOs is not in the budget, but is in a separate bill Dollar co-sponsored.
“We are pleased that the House Budget moves Medicaid reform forward and takes a responsible approach to protecting North Carolina’s most vulnerable citizens,” DHHS spokesman Kevin Howell said in a statement.