Raises for state workers, teachers included in NC budget plan
Republican leaders of the North Carolina House and Senate unveiled their budget proposal Tuesday, just days before the General Assembly is set to adjourn for the year.
The agreement between leadership in both chambers, which was reached after negotiations between Senate leader Phil Berger and House Speaker Tim Moore, would give most state workers an additional raise of 1% on top of the 2.5% they were slated to receive under last year’s budget. Higher raises would go to employees who are paid on an “experience-based schedule” or have salaries set by law.
The budget bill passed last year included a 5% raise over two years for state workers and an average 5% raise for teachers over the same period. The proposal unveiled Tuesday would increase, on average, the raise for teachers during the second year from 2.5% to 4.2%. The starting monthly salary for entry-level teachers would increase to $3,700.
Public school employees who don’t have a certification will get either a 4% raise, or have their salaries increase to $15 per hour, whichever is greater.
For retired state employees, the budget would already have given a 3% cost-of-living bonus for their pensions. The new budget brings it up to 4%.
Berger said the plan announced Tuesday was the best version of an agreement that budget writers in both chambers could reach. Berger said information about the budget had been relayed to Democratic Gov. Roy Cooper and his staff, but legislative leaders haven’t yet received a “commitment” from him.
The State Employees Association of North Carolina called on Cooper to veto the plan.
“Employers in North Carolina and all around the country are responding to their staff shortages by increasing pay and benefits in order to be competitive in the market,” SEANC Executive Director Ardis Watkins said in a written statement. “The State of North Carolina has record staff vacancy rates but the legislature is choosing to hoard money rather than give state employees reason to stay.”
State government reported a 20% vacancy rate across its workforce as of May, The News & Observer previously reported.
During Tuesday’s press conference, Sen. Brent Jackson, a Duplin County Republican, acknowledged that North Carolina hasn’t been “immune” to staff shortages. In order to help agencies recruit and retain more employees, Jackson said the budget includes an $80 million Labor Market Adjustment Salary Reserve.
Agencies will be able to receive up to 1% of their annual payroll in labor market adjustments, Jackson said.
What’s not in the budget
The budget does not include any new reductions to tax rates. The legislature has cut taxes several times in the last decade, including last year’s budget that will eliminate the corporate income tax over the next few years. The new budget did not speed that process up, nor did it include other tax cuts. Berger didn’t answer questions as to why, except to reference the secret budget negotiations between House and Senate leaders over the past few weeks.
“Some things made the cut and some things didn’t,” he said.
Nor does the budget include Medicaid expansion, a longtime priority for Cooper and legislative Democrats that Republicans have become more receptive to in recent months, culminating in two separate proposals advanced by Moore and Berger in the House and Senate.
In a statement released just before Berger and Moore unveiled the proposal, Cooper said he was encouraged both chambers have agreed on the need to expand access to Medicaid.
He called it “imperative” that the GOP-controlled legislature reach an agreement on Medicaid, and said he would review the full budget once it was released.
Budget would create inflation reserve
During Tuesday’s press conference, Berger and Moore also addressed the strain of inflation on North Carolinians and the possibility of a looming economic recession.
The leaders said that North Carolina remains well-situated financially to weather a recession, and attributed the state’s economic condition to fiscal policies enacted by Republicans over the last decade, but added that they believe it’s important for budget writers to prepare for an economic downturn.
“It seems clear to anyone who’s filled up their car recently, that a lot of policy that’s happening out of Washington, D.C. is absolutely just in shambles,” Moore said. “North Carolinians, like most Americans, are very concerned with where we are in our economy, where we are in terms of what seems to be a rudderless, runaway and over-spending federal government.”
In response to those concerns, the budget Berger and Moore unveiled includes a $1 billion allocation into a newly created State Inflation Reserve. That fund would go toward “costs associated with inflation and other measures necessary to stabilize” the state’s economy, according to the bill text, if the legislature were to pass a budget.
What comes next in budget process?
Legislative leaders expect to hold votes on the budget unveiled Tuesday by the end of this week, when lawmakers are planning to adjourn and leave town for the Fourth of July.
Moore previously told reporters that budget votes will likely take place on Friday and Saturday. Legislative rules require lawmakers to take at least five days to consider a budget proposal after reaching an agreement, before they can send it to the governor’s desk.
For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at https://campsite.bio/underthedome or wherever you get your podcasts.
This story was originally published June 28, 2022 at 5:41 PM with the headline "Raises for state workers, teachers included in NC budget plan."
