NC House budget proposal calls for 10% teacher raises, 7.5% for state workers

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North Carolina House Republicans want to give teachers and state employees significant raises in their state budget bill proposal, which they revealed Wednesday afternoon, calling it “fiscally responsible.”

Lawmakers plan to spend roughly $30 billion in late 2023 and early 2024, and a bit more than that in the following year.

“This is a budget that invests in our state employees, teachers, infrastructure and workforce development. Its budget balances the needs of the state with a growing economy while maintaining a sustainable spending path,” House Speaker Tim Moore, a Kings Mountain Republican, told reporters Wednesday afternoon.

“This is a fiscally responsible budget, cuts taxes and invest wisely. We recognize the need for targeted recurring spending as well as raises,” he said.

If the legislature can pass a state budget and Democratic Gov. Roy Cooper signs it, that will also trigger the expansion of Medicaid in North Carolina, with access to health insurance for hundreds of thousands more people. Cooper and lawmakers agreed to Medicaid expansion in a separate bill that became law this month.

The House budget proposal was posted on the General Assembly website as Republicans held a press conference.

Teacher raises, education

The budget proposal would:

Give teachers average raises of 10.2% over two years, including step increases and extra funding for rural-area educators. The raises would be 5.5% the first year, with the rest coming the second year.

Provide teachers paid parental leave of four to eight weeks.

Restore master’s degree pay for teachers.

Spend $40 million on school safety.

Require schools to post academic materials online.

Cap class sizes in elementary schools at 24 for both fourth and fifth grades.

Rep. Jeffrey Elmore, a North Wilkesboro Republican and an art teacher, said that fourth graders have been having difficulty transitioning into larger classes, since only K-3 class sizes are capped. He said they’re seeing that reflected in math proficiency. One solution is to cap class size in fourth grade, he said, as well as provide funding to third grade teaching assistants to help with the transition.

“When we picked this (size of) 24, we felt like most of the (school) systems were compliant,” Elmore told The News & Observer after the news conference.

Rep. Jeffrey Elmore speaks during a press conference Wednesday, March 29, 2023, where House Speaker Tim Moore and the House Republican budget chairs talked about their state budget proposal. Ethan Hyman/ehyman@newsobserver.com
Rep. Jeffrey Elmore speaks during a press conference Wednesday, March 29, 2023, where House Speaker Tim Moore and the House Republican budget chairs talked about their state budget proposal. Ethan Hyman/ehyman@newsobserver.com

“There were some that were running over. And you know, class size stuff ebbs and flows. So some systems that might not be at this cap right now, next year, it might be a little bit different because some classes are bigger than others as they move through,” Elmore said.

Asked if the class size cap could lead to staffing problems in some schools, Elmore said: “I feel like in this very moment, no, but as we move forward, possibly.”

The cap would go into effect in the new school year that starts this summer and fall, he said.

State employee, bus driver raises

The budget plan would provide:

State employee raises of 7.5% over two years, with 4.25% the first year and 3.25% the second year.

Additional 2% raises over two years for some employees in jobs that are harder to recruit and retain.

For school bus drivers, an additional 2% on top of the 7.5%, giving them a total raise of 9.5% over two years.

For State Highway Patrol employees, raises of 11% over two years.

A 2% cost-of-living-adjustment increase for retired state employees over two years.

State Employees Association of North Carolina Executive Director Ardis Watkins criticized the budget proposal as not giving state employees the same level of importance as others.

“The General Assembly calls state employees ‘heroes’ when we care for North Carolinians during the pandemic, clean up and restore communities after hurricanes, floods and snowstorms and die at the hands of inmates in an understaffed prison,” Watkins said in a statement to The N&O.

“But when legislators write a budget that doesn’t keep up with inflation and assigns state employees a lower level of importance than other public servants, they are calling us expendable. And state employees are hearing that message loud and clear. 37% leave in the first year of service,” she said in the statement.

“State employees either matter or they don’t. The General Assembly will have to do much better than this to convince employees that they care about the understaffing crisis plaguing state government,” Watkins said.

The current state employee vacancy rate statewide is 23.4%, which is nearly double what it was before the pandemic.

Taxes in the House budget

On taxes, the budget would:

Reduce the individual income tax rate to 4.5% in 2024, which is a year earlier than planned.

Provide an adoption tax credit.

Increase the child tax credit by 20%.

SBI, crime lab changes

The House budget would make the State Bureau of Investigation an independent Cabinet-level agency, and transfer the State Crime Laboratory out of the jurisdiction of the attorney general. The crime lab would be under SBI.

The current attorney general is Josh Stein, a Democrat running for governor after Democratic Gov. Roy Cooper’s term ends in 2024.

Rep. Brenden Jones, a Tabor City Republican, said that after testimony this week in a House committee, they needed to make some reforms. WRAL reported that State Bureau of Investigation Director Bob Schurmeier testified to lawmakers about the “need to preserve the independence and integrity of the SBI,” and said Cooper’s administration had pressured him to resign.

“There ought to be true independence for that agency,” Moore said.

Medicaid expansion

The Medicaid expansion bill that Cooper signed into law on Monday will take effect if the state budget becomes law. Between $400 and $500 million expected from expansion implementation has been woven into the House budget proposal.

Climate change

The House budget would also eliminate some Department of Environmental Quality greenhouse gas initiatives and an effort to promote “clean trucks.”

Cooper signed an executive order in October that charges DEQ with starting a rulemaking process for an Advanced Clean Trucks program to transition to electric trucks and vans.

Higher education

The budget plan funds a new UNC Law School and a proposed UNC School of Civic Life and Leadership.

UNC and community college employees would get 7.5% raises over two years, with additional money to be used for recruitment.