Raleigh, N.C. - Governor Pat McCrory’s 2015-2017 biennium budget continues his focus on job creation, education and infrastructure. It also increases help and protection for those that cannot help themselves while maintaining fiscal discipline and increasing government efficiency.
There are no tax increases in the governor’s budget.
“This budget builds on our hard-earned successes and lays the foundation for a bright future for all North Carolina families,” Governor McCrory said. “This budget recommits us to the basic values that make our state great. When we unleash our potential in education, transportation, energy and technology, and commit to greater government efficiency and affordability, North Carolina will be second to none.”
Separate from the budget, the governor is supporting legislative measures that will allocate $45 million for NC Competes and $20 million for the Site Infrastructure Development Fund, a fund designed to attract major manufacturing projects, such as an auto production plant.
Governor McCrory’s budget restores and reforms the Historic Preservation Tax Credit to continue to revitalize main streets across North Carolina while ensuring that the credits are used wisely and where they can have the most impact.
The Innovation to Jobs initiative was created to convert more university research dollars into products and services that are patented and introduced into the marketplace. To support this initiative, the governor’s budget invests $15 million in each year of the biennium in the Venture Multiplier Fund. This capital will be invested alongside private sector dollars in early stage commercial ventures. It also provides $2.5 million in recurring money for the Rallying Investors and Skilled Entrepreneurs, a program that will develop and leverage existing entrepreneurial management talent and recruit world-class investors and skilled entrepreneurs to the state.
Governor McCrory’s budget creates the University Innovation Commercialization Investment program, funded at $7.5 million during the next two budget years and recommends $5 million for the One North Carolina Small Business Program to provide early-stage funding for small, high-growth and high-tech businesses across the state.
It also appropriates $10 million in each year of the biennium to encourage the production of long-term, sustainable film projects and to further develop the film-making industry within the state.
North Carolina taxpayers have historically made a tremendous financial commitment to education, and this budget continues that legacy. More than $12 billion of General Fund monies will be spent on K-12 education in each year of the biennium. It allocates $235 million more in K-12 funding than the 2014-2015 budget—a 2.8 percent increase in spending.
As promised, $111.4 million in each year of the biennium will be spent for teacher salaries to increase teacher base pay to $35,000 a year. This allocation also funds increases for teachers eligible to move to the next tier on the salary schedule.
To support enrollment growth, this budget provides for the hiring of more than 1,400 new teachers over the biennium as well as provides $128 million to maintain teaching assistant positions over the same time period.
The budget also rewards high-performing teachers by appropriating $15 million over the biennium to implement teacher pay for performance plans.
More than $70 million over the biennium will be spent to buy textbooks, instructional supplies and equipment.
Additionally, North Carolina’s Pre-K program will expand to accommodate 26,800 at-risk four-year-olds.
The governor accelerates the talent pipeline by funding community college classes year-round, including in the summer, just like North Carolina businesses. The budget also invests $5 million for community colleges to purchase current, up-to-date equipment and technology used to prepare students for STEM careers.
The budget commits nearly $4.8 billion to lay the foundation for Governor McCrory’s 25-year transportation vision, which focuses on connecting small towns and economic centers to simplify citizens’ commutes for work, school and recreation. This includes: an increase of $135 million for critical infrastructure investments; $51 million for road preservation and improvements; $36 million for capital repairs and renovations under the Capital Improvements plan and $10 million to ease congestion in rural and small urban areas.
As the governor noted in his State of the State address, he will request a transportation bond of $1.2 to $1.4 billion for quicker construction of projects in the 25-year vision plan.
He will also request a $1.2 to $1.4 billion general obligation bond to revitalize blighted state buildings that can be saved and build new, workable and efficient facilities for the National Guard, community colleges and other agencies that will help create economic development opportunities for their communities.
Help and Protect Those in Need
To support the well-being of our most vulnerable citizens, Governor McCrory’s budget commits more than $10.8 billion to the Department of Health and Human Services over the biennium, or more than 24 percent of the General Fund annually.
Included in this allocation is an estimated need for $287 million in additional Medicaid funding in the first year of the biennium and $460.6 million in year two, taking into consideration forecasted changes in enrollment, anticipated costs per recipient, and utilization of services, as well as federal matching funds. Additionally, it supports the Healthy NC reform plan which puts patients first and controls costs for the taxpayers, while incentivizing health care providers to coordinate care.
This budget also prudently allocates $175 million over the biennium to the Medicaid Risk Reserve to provide a buffer against financial uncertainty in one of our biggest cost drivers.
The budget provides nearly $82 million over the biennium in new funding for mental health and substance abuse services and increases funding for foster care, adoption support and the collection of child support payments.
The budget also provides funds to modernize and replace equipment for the Office of the Chief Medical Examiner.
It also continues the state’s substantial commitment to the North Carolina Families Accessing Services through Technology (NC FAST) and NCTracks information technology platforms, which are replacing legacy information technology systems to efficiently serve our citizens and pay health care providers.
This budget fully funds the HOME match program with more than $1.5 million in each fiscal year. These dollars leverage federal matching funds of $20 million and enable the state to collaborate with local governments and nonprofits to serve 340 additional households, create over 400 jobs and generate an additional $1.7 million in state and local revenue. Additionally, $1 million each year is committed to the Housing Trust Fund to help alleviate the shortage of safe, affordable housing for low- and moderate-income citizens.
The governor’s budget also recognizes the dedication of law enforcement officers who protect us daily and corrections officers who confront the most violent people in our state every day.
Governor McCrory’s budget includes $21 million in funding to help compensate and retain our corrections officers and their supervisors and funds the full five percent step increase for eligible State Troopers in each year of the biennium.
There is additional funding to improve crime lab operations and reduce criminal case backlogs as well as funding for the Highway Patrol, State Bureau of Investigation, and Alcohol Law Enforcement to replace aging law enforcement vehicles to improve safety and reduce maintenance costs.
Find Efficiencies and Streamline Operations
The North Carolina Government Efficiency and Reform (NCGEAR) initiative will save more than $14 million in year one and more than $57 million in year two of the biennium. NCGEAR savings over 10 years are conservatively estimated at more than $615 million in today’s dollars.
To continue customer service improvements at the Division of Motor Vehicles, $30 million is budgeted for technology and equipment modernization.
The budget carries out government operations efficiencies called for by the Governor in his State of the State address. Future workers’ compensation costs will be reduced through consolidated reporting and an overall improvement in case management to protect against fraud and abuse.
Attractions such as the North Carolina Zoo, state aquariums, museums and state parks will be transferred from the Department of Environment and Natural Resources to the Department of Cultural Resources, which manages attractions as part of its mission. Advocacy groups will be moved from the Department of Administration to the Governor’s Office.
To strengthen the Veteran Affairs and the Office of the Military Advisor, the budget proposes the creation of the Department of Military and Veterans Affairs.
This budget streamlines state information technology operations, making them more accountable and coordinated by creating a Department of Information Technology.
“The members of my administration and I are honored to submit this budget to the General Assembly on behalf of the people of this great state,” Governor McCrory said.