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The long, hot legislative summer of 2014 appears to be drawing to a close.
Two months after the North Carolina Senate passed a budget — and more than six weeks after the House signed off on its version — the two sides came to agreement this week on a $21.3 billion state spending plan.
A Medicaid shortfall and a promised teacher pay raise, the two big adjustments in this year’s spending plan, led to most of the six-week impasse and drew in an increasingly impatient Gov. Pat McCrory, who sided with House leaders on both key issues.
McCrory promised a veto of any spending plan that included a raise for teachers in excess of 6 percent. The final plan averages out at 7 percent, but a deeper dive into the fine print shows lawmakers revamped the teacher pay scale structure and changed longevity pay — moves that could keep the governor’s veto pen in pocket.
The funding gap in Medicaid estimates between the House and Senate proposals also closed during negotiations, but the Senate pushed for a major restructuring opposed by the governor and the House leadership up to the final hours of negotiation. In the end, the House met the Senate not quite halfway in its estimates for the program. The Senate gave up on insisting its reform language be a part of the budget.
A special provision in the budget now calls for a November special session to consider restructuring the state’s Medicaid program.
The two sides also sweetened previous proposals for pay increases for state employees, who will get five additional days of paid leave plus a $1,000 pay increase and a $236 contribution to retirement benefits.
One significant change from both House and Senate versions is the elimination of funds for new positions at the N.C. Department of Environment and Natural Resources for coal ash monitoring and enforcement. Previous versions of the budget included more than a dozen new positions at the agency for the program. A House-Senate conference committee continues to work on separate coal ash legislation.
The budget now starts working its way to the governor’s desk this morning (Thursday), when it will be introduced in the Senate. The process there is likely to wrap up by Friday followed by another two-day stay in the House.
The bill is being introduced as a conference report. That limits the amount of time needed to pass it and it prevents amendments to the measure.
Legislators have said they want to wrap up as early as Saturday, but their track record on predictions this session does not make that a safe bet.
NC state budget bill spending breakdown
• Spends an additional $282 million for teacher pay increases averaging 7 percent or roughly $3,500. Newer teachers would receive the highest pay increases.
• Changes the system for step increases, reducing the number of steps from 32 to six.
• Non-certified and central office staff would get a $500 salary increase and an $118 benefit contribution.
• Adds $42 million for class size reductions in kindergarten and first grade.
• Requires epi pens for emergency treatment of allergic reactions in all schools.
Health and Human Services
• Reduces the number of local mental health agencies in the state from nine to seven.
• Cuts payouts to providers for Medicaid services by 4 percent.
• Changes eligibility to reduce child care subsidies and county-based special assistance for blind, elderly and disabled residents.
• Cuts a total of 17 positions at DHHS, with a reduction of 12 positions in Vocational Rehabilitation.
• Moves the State Bureau of Investigation from the Department of Justice to the Department of Public Safety.
• Calls for a study of the role of the Attorney General.
• Moves the state Alcohol Beverage Control Commission to the Department of Public Safety.
• Requires that future constitutional challenges, such as the recent Asheville water system lawsuit, be heard by a special panel of three Superior Court judges and requires Senate confirmation for the governor’s appointees for to the panel.
The new budget retains a plan backed by both chambers allowing the sale of $15.4 million in bonds along with planning money for a new Western Crime Lab in Edneyville in Henderson County. The budget also includes money to hire 10 forensic scientists and technicians for the Forensic Biology and DNA unit at the lab.
Other spending and capital projects in WNC include:
• $2 million for the McGough Arena roof at the Western North Carolina Agricultural Center.
• Start-up funds for Buncombe Discovery Academy in Buncombe County.
• $75,000 as part of a match for the REACH program’s new shelter for women and families serving Macon and Jackson counties.
• $3 million for planning for a new health science building at Appalachian State University.
• Expansion of the Asheville revenue office of the N.C. Department of Revenue in Buncombe County.
• $500,000 for agricultural water pollution control projects in Avery, Buncombe, Burke, Cherokee, Clay, Graham, Haywood, Henderson, Jackson, Macon, Madison, McDowell, Mitchell, Swain, Transylvania, Watauga and Yancey counties.
• $100,000 for paving improvements at the WNC Farmers Market in Buncombe County.