Last night, the entire House budget was posted online on the General Assembly’s website. I got my copy of the budget this morning, and I’ve just begun to go through it. (The accompanying committee report can be found online here).
If I were to characterize the House budget proposal, I’d say its educational focus is on innovation in schools and protecting dollars that directly impact the classroom.
The House budget provides $11.5 for education — a reduction of 2.2%. It includes $7.9 billion for the K-12 system (a 1% reduction), which is smaller than the Senate’s cut and similar to Governor McCrory’s proposal.
The proposed House budget restores funding for the Teaching Fellows program (and the NCCAT), and reduces the School Boards’ flexibility adjustment in the second year. The proposed House budget provides $26 million in lottery funds for digital learning initiatives in the K-12 budget, but this will not be completely good news for counties since it reduces the county allocation, which in Henderson County is used to pay off debt related to school construction.
The House Budget funds several new initiatives for public schools:
- Advanced Placement/International Baccalaureate: Provides $1.5 million in FY 2013-14 and $15.8 million in FY 2014-15 to encourage participation in AP/IB and award incentive bonuses to teachers of successful students;
- Opportunity Scholarships: Provides scholarship grants of $4,200 per year for eligible students to attend nonpublic schools;
- School Safety: Provides $16 million for additional school resource officers, school counselors, social workers, and installation of panic alarms;
- Career Technology Education Test Fees & Incentive Bonuses: Provides $1.2 million in FY 2013-14 and $7.0 million in FY 2014-15 to defray student fees for certification exams, and provide incentive bonuses to the School Boards’ on the basis of student certification in high-value fields;
- Education Innovation Grants: Supports a $2.0 million pilot program providing competitive grants to innovative schools and School Boards
Perhaps the issue on which I heard the most was funding of Teaching Assistants. The House proposed budget reduces funding for Teacher Assistants by 4% in FY 2013-14 and by 5% in FY 2014-15. The Senate Budget reduced funding for Teacher Assistants by approximately 25%. The House budget also fully funds the allotments for textbooks and school supplies.
The Community College System receives $1 billion in the House budget (a 2.4% reduction). The House plan budgets $2.6 billion for the UNC system, which is a reduction of 5.5%. This reduction is larger than the Senate, but smaller than Goernor McCrory’s budget.
One of the new initiatives in the UNC budget is the NC Guaranteed Admission Program (NC GAP), which will provide certain students with guaranteed admission to a UNC campus as a junior upon completion of an associate’s degree. A reduction of $12.6 million to UNC enrollment funding is included for FY 2014-15; additionally, $4.5 million nonrecurring in FY 2014-15 is provided in the Community College section for an anticipated increase in enrollment in that system. The idea here is to save money by diverting some number of students from the high-cost UNC System to the lower cost Community College system.
Both the Community College budget and the UNC budget include tuition increases. For community colleges, tuition increases by $2.50 per credit hour for all students. The UNC tuition increases tuition for nonresident students by 12.3% at the larger universities and by 6% at the other campuses, including Western Carolina University and UNC-Asheville.
My biggest concern with the House budget is teacher and faculty salaries, specifically our inability to provide raises. One may wonder how the Governor was able to provide a 1% pay raise but neither the Senate’s budget nor the House’s proposed budget provide funds for a raise.
Since March, when the Governor submitted his budget, we have better data on expected state revenues and expenses. While the revenue forecast has improved slightly, the funding of Medicaid (which is an entitlement) has ballooned. Essentially additional revenues and funding for the small pay raise has been consumed by increased Medicaid funding.
Health & Human Services (HHS)
- The HHS budget funds increased Medicaid costs but takes steps to continue to reform and ultimately fix Medicaid;
- The HHS plan establishes short-term assistance for group home recipients until a permanent solution is implemented statewide;
- Under the House budget, an additional 5,000 Pre-K slots are funded, bringing the total to 30,000. Eligibility for Pre-K changes from 75% of NC median income to 130% of the federal poverty level.
Natural & Economic Resources (NER)
- The NER budget includes funds a new program focused on growing the bioenergy sector in North Carolina;
- The House budget funds the Clean Water Management Trust Fund, but it appears to put the CWMTF under the NC Department of the Environment and Natural Resources (This is a change I probably wouldn’t support);
- The proposed budget funds the Wildlife Resources Commission at an 11% reduction;
- The NER budget also funds the Rural Center, the Biotechnology Center, and the Grassroots Science Museums.
Justice & Public Safety (JPS)
- The JPS budget provides $25 million to upgrade the VIPER system, a communication system used by the Highway Patrol and other law enforcement agencies;
- The House plan restores 16 magistrate positions that were eliminated in 2011-12;
- Increases funds to expand electronic monitoring for probationers;
- Funds additional probation and parole positions to meet requirements of Justice Reinvestment Act;
- Adds 19 additional toxicology positions in the State Crime Lab;
- Expands an existing program to include funding for substance abuse treatment for high-risk offenders.
- The House Transportation budget streamlines government by eliminating 631 vacant positions, working to implement Governor McCrory’s transportation plan, and conforming to House Bill 817 (Strategic Transportation Investments);
- The Transportation budget focuses on funding projects associated with economic development opportunities to increase job development potential;
- The plan maintains the fare structure and rates for currently tolled ferry routes;
- The House provides more than $300 million for resurfacing;
Information Technology (IT)
- The House IT budget funds the Criminal Justice Information Network and geographic information systems services;
- The IT budget develops a state motor fleet management system;
- The House budget on General Government apparently focuses on efficiencies in state government by setting priorities;
- The budget directs the Department of Cultural Resources to seek non-state resources to fund historical sites and museums, while funding historical sites appropriately;
- Lessens reductions to the Arts Council Grants;
- Fully funds the House plan for voter identification (VIVA);
Again, this is my quick review of the budget. If you’re really interested in the detail, you ought to look at the budget online.
What Happens Next
The House Appropriations Committee will take up the budget tomorrow (Tuesday, June 11). The expectation is that the committee will work all day on Tuesday before voting out a budget that will come to the House floor on Wednesday and Thursday. Upon passage of the House budget, conferees for the House and the Senate will be appointed to try to work out the differences between the budgets passed by each legislative body. The Governor’s representatives will also be a part of those negotiations. Leadership in the House hopes that the budget for FY 2013-2014 will come to the floor the following week.
I’m pretty skeptical of that schedule because contemporaneously the Senate and the House are working on competing tax reform proposals. Since one can’t really know what the budget will be until one agrees on what the revenues will be, I’m expecting that the budget process might not go as quickly as the House leadership would like.