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Governor Releases $20.6 Billion Budget Proposal

Governor McCrory's recommended budget
NC Office of State Budget and Management

Governor Pat McCrory released his budget proposal earlier today. It’s a $20.6 billion plan that emphasizes spending on education and economic development and sets aside money for emergencies. It doesn’t seek to create any new high-priced programs.

Earlier today, Governor McCrory told reporters in a news conference at the historic old State Capitol that North Carolina needs to fix its broken government.
"We have a strong foundation, but the foundation now has some cracks in it," said McCrory. "And our immediate goal is to fill in some cracks, and fix those cracks, so we can have a stronger foundation for future generations."

The governor says that foundation must be fixed first, before the state can embark on revamping the educational system and other projects. His $20.6 billion budget is a cautious, unsurprising plan that benefits from a bump in tax revenue, but offers little innovation. McCrory says the budget "is focusing on the three State of the State areas that I mentioned in our speech. Those are the economy, education, and government efficiency."

McCrory’s budget would allocate $400 million to the state’s rainy day fund, $300 million for state building renovations and $180 million for potential Medicaid shortfalls. The governor says K-12 education will continue to be a priority.

His budget provides money for 5000 more at-risk 4-year-olds to attend pre-kindergarten programs. And, he says, there’s funding for teachers too: "our budget prioritizes the money to hire 1800 additional teachers over the next 2 years. Now we also made a commitment in the State of the State to expand digital learning for students. And we’re following through with that commitment in this budget."

But the governor’s budget would also cut $117 million in funding that pays for teacher assistants in the lower grades. And the University of North Carolina system would be slashed by more than 135 million dollars. Community colleges face big cuts as well. However, McCrory says it’s important to provide money for a new economic development strategy to accomplish what he calls “updating North Carolina’s brand.”

"During our campaign, I talked extensively that our brand needs updating. Our strategy needs updating. And now is the time to do just that, and we think there’s a sense of urgency to do that as we’re recruiting new customers to come to North Carolina and were trying to talk existing customers to stay or expand," says the governor.

McCrory’s budget proposal would allocate $2.7 million to retool the state’s economic development strategy. It’s in keeping with his theme of improving customer service in the state for residents.

But Democratic lawmakers think that sounds fishy. According to Senate Democratic Leader Martin Nesbitt, "One day he admits we got a great brand and it’s the best place to live, and the next day we gottarebrand, I’m not sure exactly what we’ve gottarebrand to. I guess the thing to do is say we’re going to make it better tomorrow. I guess that’s what we’re doing here."

Nesbitt and other Democrats say the governor’s budget does nothing to create jobs or grow the economy while continuing cuts to education. The plan would also eliminate the estate tax, which benefits wealthy families. It would cut reimbursement rates to rural hospitals for Medicaid, and it would eliminate five prisons in rural communities.

That's a big concern for Democratic Representative Jean Farmer-Butterfield, who says "you’re eliminating prisons so you’re cutting out jobs in small and rural communities, and in addition to that, you are doing everything you can to elevate the upper class in this state, and deflate the job markets and unemployment compensation and expansion of Medicaid services to people who are desperately in need in this state and yet you don’t create jobs for them."

But Republican leaders in both the House and Senate say they stand behind the governor’s budget plan. Senate leader Phil Berger says the proposal reflects a commitment to the long-term fiscal health of the state.

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