Gov. Pat McCrory revealed yesterday the full details of his proposed $21 billion budget for the upcoming fiscal year, on the first day that the legislature returned to Raleigh for its short session.
With the state facing a $445 million revenue shortfall this fiscal year and another projected $191 million shortfall next year, along with high Medicaid costs and a tax plan that creates structural deficits for years to come, many wondered how McCrory planned to pay for his proposed $263 million package (the cost of his plan for just one year) that would provide relatively small raises to most teachers and state employees, in addition to other education reforms.
The answer? Relying on one-time sources of funds and raiding higher education of desperately needed resources in the hopes of placating teachers who have reached their boiling points.
The Governor’s education plan
The state’s 95,000+ teachers report feeling disrespected, overworked, and underpaid after many years of little to no action on the part of the legislature to improve their pay and working conditions.
The state has fallen to 46th in national rankings on teacher pay, making it difficult to take dramatic steps to bring North Carolina back up to the national average quickly enough to make a difference for today’s teachers.
Complicating the situation even more is last year’s tax plan, which replaced a progressive income tax with a flat 5.75 percent tax that provides cuts for the wealthy, large tax cuts to corporations and a scenario where the state can anticipate revenue shortfalls of at least $500 million a year going forward.
The impetus for this tax plan is to stimulate the kind of economic growth that would make up for those shortfalls, but only time will tell if this plan can achieve those goals – so far, economic growth has come below projections.
In light of these realities, McCrory drew up a proposal that contains a two pronged approach: first, offering classroom teachers an average two percent raise, with significantly more for beginning teachers, and a flat $1,000 raise for state employees.
Those raises comprise the bulk of his $263 million proposal – and that figure just pays for the first year, not the ongoing cost of those raises in years to come.
Second, McCrory proposed a career pathway plan that would endeavor to keep teachers in the classroom for the long haul.
Under this part of the proposal, which includes a streamlined salary schedule, additional pay bumps would be provided to teachers who teach subjects that are in high demand in the marketplace (e.g. chemistry or math), those who teach in hard to staff schools, those who produce positive results in the classroom (i.e., higher test scores) and those who have advanced degrees in the field in which they teach.
But many of those proposed long-term reforms wouldn’t be implemented statewide until 2018, long past this upcoming budget year.
McCrory also proposed additional restorations to public education of a relatively smaller scale. Some of those include:
Textbooks: grossly underfunded for the past several years, many classrooms haven’t been able to adopt new textbooks in five years or more. Noting the slow rate at which the state has been able to make the transition to the digital age, McCrory proposed to double the current textbook budget with lottery funds (a non-recurring funding source) to $46 million – still a far cry from the $116 million budget of 2009.
PreK: the waitlist for PreK slots, which go to low-income children in North Carolina, is reportedly in the tens of thousands; McCrory proposed to add $3.6 million to the PreK pot, which amounts to a bit more than 700 new slots. (Funds for this addition came out of the federal TANF grant, which is intended to provide welfare funds to low-income families)
Advanced degrees: McCrory proposes to restore advanced degree supplemental pay (a 10 percent bump) for those who have a) taken a course toward their advanced degree as of July 1, 2013, and b) for any personnel who have received an advanced degree and are teaching in the subject of their academic preparation.
Career pathways: McCrory proposes a $9.7 million pilot program to test the long-term reforms mentioned previously in eight school districts next year. Like textbooks, this too is funded with lottery receipts, a one-time source of dollars.
Teachers want more
“Our teachers have options,” said former N.C. social studies teacher of the year, Justin Ashley, at a news conference held by the North Carolina Association of Educators yesterday morning. “Their names are Virginia, Tennessee, South Carolina, and the private sector.”
Teachers and education advocates who came to Raleigh yesterday to welcome lawmakers back to work made it clear that while they are somewhat pleased with signs that the legislature believes it’s time to do more for public schools, they’re hardly feeling relieved about the overall picture.
“A two to three percent pay raise for teachers is inadequate,” said NCAE president Rodney Ellis, explaining that he’d like to see an across the board pay raise that is more meaningful.
Educators haven’t seen a significant pay raise since 2008. Since that time, their salaries have been frozen, with the exception of one 1.2 percent pay increase from the legislature in 2010 and no step increases that many say should be contractually guaranteed.
As health care costs and the cost of living have increased over the past six years, educators say their wages have been effectively declining. In search of a higher pay, teachers are fleeing to neighboring states where salary increases are often as much as $10,000 upon walking in the door.
Dr. June Atkinson, the state superintendent at the Department of Public Instruction, where NCAE’s press briefing was held, offered her own remarks to the teachers and lawmakers present.
“Teachers didn’t get in this to become millionaires, but they didn’t take a vow of poverty either,” said Atkinson, who called on the General Assembly to raise teacher pay and come up with a long-term plan to keep teachers in the state.
Speaking with teachers who made the trip from Harnett County to be in Raleigh yesterday, elementary school teacher Lydia, who is a 17-year veteran and did not feel comfortable giving her full name, explained that she is working harder than ever before.
“I work sixty plus hours a week, and during the summer too,” Lydia said. “I like that Gov. McCrory sees that there’s a need, but everyone is deserving of a significant step and pay increase.”
“And I am totally against performance-based pay. We work very hard on teamwork and collaboration. Is making a pay increase contingent on a test score worth sacrificing what’s best for our kids?” Lydia added.
Ultimately, the Harnett County teachers said they came to Raleigh for their students.
“A pay increase is what would be fair, but we’re really here for our kids,” said Lydia.
Robbing Peter to pay Paul
While not expressly highlighted at Gov. McCrory’s budget presentation yesterday, one area of education took a very noticeable hit – the UNC system.
More than $49 million went missing from the University of North Carolina’s budget, the bulk of which was characterized as a “two percent management flexibility reduction” that asks UNC to find efficiencies that would save the state $44 million.
Suggestions for efficiencies in McCrory’s budget include faculty workload adjustments, reducing senior and middle management, eliminating low-enrollment programs, and restructuring research activities.
“To improve North Carolina’s economic position, attract new industry and create needed new jobs, North Carolina must continue to maintain its strong public university system,” said UNC system president Tom Ross in a press release following the Governor’s budget presentation.
“We owe our students a high-quality education, and there is no great university without great faculty. This budget would make it increasingly hard for UNC campuses to recruit and retain the best and most accomplished faculty, as well as staff,” said Ross.
The UNC system is no stranger to steep budget cuts. In 2011, the state’s esteemed universities had to cut $80 million, or 3.4 percent of its overall budget. Five hundred classes were eliminated, 3,000 jobs were cut and another 1,500 vacant jobs were eliminated.
In the four years prior to 2011, state funding to the university system was slashed by $1.2 billion.
McCrory’s budget proposal also makes a $13 million cut to all UNC centers and institutes that are not directly involved in degree production, a $10 million cut to scholarship programs for nonresident students, and a $24 million cut to account for fewer numbers of students enrolling at the state’s public universities.
Other budget items helped contribute to McCrory’s bottom line.
The Department of Public Instruction (DPI) revised its budget projections for 2015 downward by $102 million, thanks in large part to high numbers of teachers leaving the classroom, as well as revised enrollment figures.
Wake County recently held a press conference to raise the alarm over its high teacher turnover rate – that county experienced a 40 percent jump in mid-year resignations. When teachers leave, the state typically “saves” money by either having that position remain unfilled for a period of time, or hiring in a new worker that often costs less than the previous employee.
DPI estimates that it will also be able to give nearly $140 million in unspent funds back to the state for fiscal year 2014. Those funds come entirely from the lower cost of teacher salaries, attributable to a higher than normal teacher turnover rate over the past year.
Large cuts were also made to other areas of the budget, including the embattled Department of Health and Human Services.
Just a proposal
Last year, Gov. McCrory made a budget proposal that also included many recommendations for education—but what was ultimately written into law did not include many of his goals.
McCrory asked for a one percent across the board raise for teachers, to no avail.
McCrory asked for $58 million in new textbook funding, and got nothing from lawmakers.
McCrory asked for $9 million in additional instructional supplies, a starved line item of the budget that has been singled out over and over by superintendents and educators for making it extremely difficult to do their jobs.
Instead, lawmakers cut $6 million from instructional supplies last year.
While Speaker Thom Tillis has signaled some positivity toward the Governor’s proposal, and Senate leader Phil Berger has offered a somewhat cooler, yet still positive, response, at the end of the day Gov. McCrory’s budget proposal is just that – a proposal for lawmakers to consider as they craft a final budget that they ultimately pass into law.
Education reporter Lindsay Wagner can be reached at 919-348-5898 or firstname.lastname@example.org 
(Source for above teacher image: NC AFL-CIO Flickr feed , )