- Associated Press - Wednesday, April 27, 2016

RALEIGH, N.C. (AP) - Gov. Pat McCrory’s $22.3 billion budget proposal released Wednesday relies on slower Medicaid growth and a small revenue surplus to let him offer permanent pay raises to most teachers and avoid proposing spending cuts that have become routine since the Great Recession.

Tax collections are projected to be $237 million above expectations this current year. Lower than estimated Medicaid enrollment and use of medical services means McCrory’s budget would reduce anticipated Medicaid spending starting July 1 by $319 million.

These unanticipated funds have allowed McCrory’s budget adjustments for the second year of the two-year state budget to offer average 5 percent salary raises to more than 80 percent of public school teachers - those with up to 24 years’ experience this year.

These teachers also would receive $1,100 bonuses, according to McCrory’s office. Those teachers with more than 24 years would get $5,000 bonuses. Principals and assistant principals also would get bonuses.

“If there’s one take away from this budget, it’s the governor’s commitment to teachers,” State Budget Director Drew Heath told members of the House and Senate appropriations committees. The recommendations, if approved by the legislature, would raise the average teacher salary by about $2,300 to $50,244.

While Republicans generally praised the proposal - highlights of which were released late last week - many committee members questioned why most rank-and-file state employees would receive only bonuses of 3 percent on average.

“How do you give an increase to teachers statewide of 5 percent and not give the same thing to state employees?” said Sen. Tommy Tucker, R-Union, a heating and air conditioning company owner. “If I was giving merit increases … I couldn’t give one group of people a raise not give other people the same raise across the board.”

Heath responded that it’s a “matter of priorities. The governor wants to invest in teacher pay above other sectors of employees in North Carolina.”

McCrory also has made it his policy to focus on targeting permanent pay raises to attract and retain workers in hard-to-staff or high in-demand fields. The budget adjustment proposal seeks $27 million for a special fund designed to target those fields. McCrory also does seek permanent raises for state law enforcement officers, certain prison workers and assistant prosecutors and court clerks.

Despite Tucker’s question, Senate Republicans have generally agreed with McCrory’s strategy, while House GOP leaders want across-the-board raises for state workers, who have received only two such raises since 2009. They got $750 bonuses this fiscal year.

“I am very certain that that option will be considered strongly,” said Rep. Nelson Dollar, R-Wake, senior co-chairman of the House Appropriations Committee.

Sen. Harry Brown, R-Onslow, the leading Senate budget-writer, said there is a disagreement with the House on that.

The House will draw up and approve budget changes first. Speaker Tim Moore, R-Cleveland, said this week his chamber wants to send its version to the Senate by May 20. The Senate then will create its own plan. The two sides will negotiate a final compromise they’ll ask McCrory to sign.

Democrats and their allies criticized McCrory’s budget, saying the proposed funding increase for public schools didn’t go far enough and blamed recent Republican tax cuts with leaving the state less money to meet critical needs.

“The Great Recession is largely behind us,” Senate Minority Leader Dan Blue, D-Wake, said in a news release. “Yet, our spending levels and critical state employee salaries would lead us to believe that it’s still 2009.”

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