It took no longer than the first budget meeting before the battle lines were drawn in what will become the biggest spending-related debate of 2016.
It will be about raises and bonuses for state employees and teachers, as well as cost-of-living adjustments for government retirees.
It is an election year, and N.C. General Assembly lawmakers have a modest surplus at their disposal for the fiscal year that begins July 1.
At a meeting of the N.C. House and N.C. Senate appropriations committees, Andrew Heath, Gov. Pat McCrory’s budget director, outlined the governor’s priorities for raises and bonuses.
McCrory wants to bring average teacher pay in the state above $50,000 a year through average 5 percent pay increases. Teachers also would get bonuses.
His budget includes bonuses, but not across-the-board raises, for other state employees. It also does not include increases for retirees.
McCrory’s top priority is bringing average base teacher pay above $50,000 to put the state more in line with other states.
“The governor was laser-focused on doing that and trying to do something bold and historic by getting it above $50,000 for the first time,” Heath said.
The governor’s budget also includes money for raises for positions that are hard to fill or hard to retain because the private sector pays more.
As legislators started asking questions, disagreement was evident.
N.C. Sen. Tommy Tucker, a Waxhaw Republican, questioned why the governor’s budget would give 5 percent raises to teachers but not across-the-board raises to other employees. Other state employees do not get the time off that teachers do, he said.
“I look at my own company, and if I was giving merit increases, I could justify it,” he said. “But in my own company, I couldn’t give one group of people a raise and not give another group of people the same raise across the board.”
N.C. Rep. Paul “Skip” Stam, an Apex Republican, pointed out that non-teacher state employees generally live in areas with higher costs of living, like Raleigh.
N.C. Rep. Bobbie Richardson, a Louisburg Democrat, expressed concern about the lack of cost-of-living increases for retirees in the governor’s spending plan.
“Those are people that has made North Carolina what it is,” she said.
The House and Senate have different ideas on how raises and bonuses should be handled. House leaders appear to like the idea of across-the-board raises for all state employees.
“I’m very certain that that option will be considered strongly,” said N.C. Rep. Nelson Dollar of Cary, the House’s top budget writer.
But the Senate – like the governor – is more likely to reward employees who work in dangerous fields, such as prison guards, and areas where state pay does not compare favorably with private sector pay. Sen. Harry Brown, a Jacksonville Republican and the Senate’s top budget writer, said across-the-board raises over many years have created a situation where some state employees are “probably overpaid,” while others are “definitely underpaid.”
The salary discussion is all-important this year because Republicans who control state government want to satisfy as many state employees and teachers as possible in this election year.
It is important because those employees and teachers are clamoring for raises.
It is important because more than a handful of Republicans, especially in the House and especially in areas near Raleigh and Charlotte, where voter demographics are changing rapidly, are in for tough re-election battles.
And the governor’s budget is important as McCrory faces a strong re-election challenge from Democratic Attorney General Roy Cooper.
“I think it is a matter of priority,” Heath said when asked why teachers fare better than other state employees in McCrory’s budget. “The governor wants to invest in teacher pay above other sectors of employees in North Carolina.”
And that, in two sentences, is where this year’s budget debate will begin and end.
Patrick Gannon is the editor of The Insider State Government News Service in Raleigh. Reach him at [email protected]