NC House & Senate Reach Agreement On State Budget

House and Senate leaders announced Sunday they have reached an agreement on a $20.6 billion state budget that invests in core services, streamlines state government, strengthens public education and grows North Carolina’s economy.

A news release from the General Assembly says, "The budget safeguards North Carolina’s long-term fiscal health and offers close to a 2.5 percent increase in overall spending while cutting taxes for all North Carolinians. It accomplishes this while including over $1.5 billion in additional state dollars to fund out-of-control, unexpected costs in Medicaid."

“Together, members of the House and Senate have carefully crafted a plan that smartly invests in key priorities like education and public safety while fulfilling our shared commitment to fiscal responsibility and accountability in state government,” said Senate President Pro Tempore Phil Berger.

The plan also provides one-time compensation to living victims of a state-sponsored Eugenics program that ended in the 1970s and stops the what lawmakers call blatant misuse of tax dollars at the N.C. Rural Center.

“Once again, Republicans in the General Assembly have produced a state budget that reduces taxes and right-sizes state government,” said House Speaker Thom Tillis. “This budget is another crucial step in putting North Carolina’s fiscal house in order.”

The state budget for fiscal years 2013-2015:

In Education: Fully funds enrollment growth in K-12, community colleges and the university system. Adds $23.6 million to continue funding the Excellent Public Schools Act, which will strengthen student literacy, improve graduation rates and increase accountability.
Eliminates guaranteed lifetime employment for teachers by replacing the outdated tenure system and employing teachers through contracts that are renewed based on job performance. Continues our commitment to implementing a pay for excellence system by including $10.2 million in the second year to fund annual pay raises for the most effective teachers. Implements opportunity scholarships in the second year of the biennium. Provides funding to implement critical school safety measures, such as resource officers, and expand the use of technology and innovation in schools. Eliminates the K-12 flex cut for local school districts, implemented by Democrats under former Gov. Bev Perdue, to make the education budget process fully transparent. Restores $33 million in recurring state funds to our community colleges. Funds the N.C. Back to Work program, providing nearly $5 million to allow for a more effective job placement program. Incorporates the administrative and operational savings, instructional efficiencies and program consolidation efforts identified by the university system in their Strategic Directions Plan.

In Health and Human Services: Provides over $1.5 billion in additional state dollars to fund massive cost overruns in Medicaid.
Includes a special provision to allow the executive branch to develop a comprehensive plan for Medicaid reform over the next several months. This action is the first step necessary for our state to bring about meaningful change to Medicaid. Provides support to our state’s mentally ill and developmentally disabled by appropriating $4.6 million in the form of temporary, short-term assistance for individuals living in group homes. Allocates $12.4 million in education lottery funds for an additional 2,500 Pre-K slots. Keeps open Alcohol and Drug Treatment Centers, with a directive to find efficiencies. Establishes regional rates for payment of hospital inpatient services to eliminate the wide, and often unfair, disparities in how hospitals are paid for the same service.

In Transportation: Supports the governor’s vision for overhauling the North Carolina Highway Trust Fund, which consolidates various funding streams to prioritize and accelerate transportation infrastructure projects at the state, regional and local level by an estimated 35 percent over the next ten years. Continues efforts to remove politics from transportation decision-making by eliminating named projects from statute, including previously mandated toll projects and the off-the-top gap funds, and mandates a data-driven prioritization process that includes local input to select future transportation investments. Provides funding for targeted maintenance needs, focusing on improving, repairing and replacing structurally deficient bridges and roadway resurfacing. Funds the replacement of information technology systems critical to DMV customer service improvements and extended operating hours at driver license offices.

In Economic Development, Agriculture and the Environment: Launches an accountable new Rural Economic Development Division within the state Department of Commerce – led by a new Assistant Secretary – with a focus on improving rural services and addressing rural needs. Invests in a new Rural Infrastructure Authority, a streamlined and efficient program where our rural communities can get the support and resources they need without regard to political connections. Maintains funding to spur clean water initiatives and improve water and sewer infrastructure.
Allocates $1 million in 2013-14 for BRAC to protect and expand our state’s military bases and economy. Provides $60 million for Job Development Investment Grants (JDIG) and $14 million for the Job Maintenance and Capital Development Fund (JMAC) over two years.
Allocates $1.25 million for an expansion of shale gas sector development.

In Justice and Public Safety: Restores funding for 69 trooper positions within the State Highway Patrol and provides increased funding for needed fuel, equipment and training. Adds 22 magistrates and 175 probation and parole officers across the state to ensure cases are processed smoothly and criminal offenders are supervised and complying with the law.

Elsewhere: Fulfills our obligation to state employees by fully funding the state retirement system and state health plan and providing 5 bonus leave days for state employees. Ensures budgeting certainty for cities, counties and towns by providing localities with some transitional hold harmless funds. Sets aside approximately $230 million for the rainy day fund to protect against future shortfalls, bringing the total to approximately $650 million.