Gov. Pat McCrory proposed a modest $20.6 billion state budget Wednesday that includes a 1 percent pay hike for state employees but limits spending growth to 2 percent.
The Republican governor emphasized spending on education and economic development, two campaign priorities in the plan, by including money to hire 1,800 additional classroom teachers and $2.7 million to craft a new branding strategy to lure companies to the state. Another 5,000 at risk 4-year-olds would be able to get into pre-kindergarten programs, at a cost of $9 million a year. But it also cuts $117 million that now funds teacher assistants.
“We have a sound foundation but the foundation now has some cracks in it,” McCrory said in an announcement at the Capitol. “Our immediate goal is to fill in those cracks ... so we can have stronger foundation for future generations.”
McCrory included no major high-priced spending initiatives, reflecting the state’s still tenuous economic picture and his campaign promises to limit government programs. On average, state agencies will see their budgets cut 1 percent to 3 percent from the current year’s $20.2 billion spending plan, leading to some jobs cuts and the elimination of longtime state interests. The budget year starts July 1.
Other line-items hit major themes McCrory highlighted in his campaign and recent State of the State address. His two-year budget, which calls for spending $20.6 billion per year, proposes:
• Giving state retirees a 1 percent cost of living adjustment for pensions
• Adding money to provide Saturday service at 30 Division of Motor Vehicles offices to improve service
• Eliminate the estate tax at a cost of $109 million over two years
• Close four historic sites across the state and eliminate 12 jobs
• Provide $10 million to compensate victims of the state’s defunct sterilization program, a small portion of what advocates say is needed
• Allocates $300 million to renovate and repair dilapidated state buildings
• Close six state prisons, including five in eastern North Carolina, citing a decline in the state’s prison population.
Putting aside another $600 million in reserves, McCrory said his plan is fiscally responsible and doesn’t use one-time money to balance the budget.
“We need to start replenishing our rainy day funds and pay down our unfunded liabilities,” he said, mentioning the possibility of federal budget cuts. “It’s very important to do so there are no surprises.”
The inch-thick, 300-plus page document starts the state budget process in earnest. State lawmakers, who began crafting their own budget plan weeks ago, will hear a presentation on the governor’s budget Thursday.
“His emphasis on paying off our debts and repairing our critical infrastructure reflects a vision and commitment to the long-term fiscal health of our state,” Senate leader Phil Berger, an Eden Republican said in a prepared statement. “We look forward to reviewing the governor’s plan in greater detail, and feel confident we will share common ground on many important priorities.”
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