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The battle between the House and Senate is coming to a close.  Late Wednesday night the most recent budget deal for the 2015 year was posted on the General Assembly’s website.  This budget is truly a compromise between the House and the Senate and incorporates many items from both of the original budget proposals.  Both chambers had to change some of their positions to compromise and arrive at the plan that passed the Senate early this morning.

The main story in the budget is the teacher pay increase.  The agreement grants an average 7 percent salary increase.  The largest increases will go to teachers in their first 11 years of service, increases between 7.1 and 18.5 percent.  Analysts at JLF believe the more tenured teachers will get a raise or have some sort of financial award for their dedicated service, but it will be in future years.  This year’s priority was to raise the starting teacher salary to $33,000.

The other major change to teacher salaries was in the step salary schedule.  Previously, the state had 37 steps for teachers; now they have six.

Years of Teaching

Base Salary (10 months)













The salaries listed above are the base amounts.  Many teachers receive additional pay such as the national board certified supplement, a masters supplement, or a local salary supplement.  Each teacher is different, but the chart above shows the new step system.  It does not mean that each teacher at a particular level of service is actually taking home that amount.

Lawmakers are also relying on lottery funding more heavily than in years past.  In this budget, the following is where legislators have chosen to spend lottery dollars, approximately $102.8 million more than last fiscal year.

FY 2013-2014

FY 2014-2015

Classroom Teachers

$ 220,643,188

$ 254,586,185

Teacher Assistants



Prekindergarten Program



Public School Building Capital Fund



Scholarships for Needy Students



UNC Need-Based Financial Aid



UNC Need-Based Financial Aid Forward Funding Reserve



Digital Learning




$ 481,832,724

$ 584,635,507

That is just an overview, but there is a lot more going on in K-12 Education.  If you want more details, my colleague Terry Stoops has a newsletter that outlines more of the specifics in the public education section of the budget.  Read his newsletter here.

Here are some of the major budget items being discussed in areas outside K-12 Education:

  • Agencies or departments allowed to make cuts as they see fit.  This is defined as a flexibility reduction or cut.  The following are those that were given flex cuts in the budget:
    • 1.2% management flex reduction to the division of Agriculture and Consumer Services,
    • 3% management flex reduction to the Department of Labor,
    • 16% reduction in funding to the Wildlife Resources Commission,

    • 2% reduction in funding to Department of Commerce (excluding the Industrial Commission),

    • 0.5% management flex reduction to the Department of Public Safety,

    • 3% cut to Department of Justice, no reductions to the State Crime Laboratory,

    • 1.3% reduction to the Office of the Secretary of State,
    • 10% reduction to the Department of Public Instruction,

    • 3% management reduction to the UNC operating budget.

  • Salary increases for state employees other than teachers:

    • $1,000 salary and benefit increase ($809 in salary) for school administrators

    • $618 salary and benefit increase ($500 in salary) for non-certified and central office education staff

    • A salary increase from 5% to 6% for State Highway Patrol troopers who are step-eligible.  Those who are not step-eligible will receive a $1,000 salary increase.

    • $1,236 salary and benefit increase ($1,000 in) for employees in all other areas of state government

  • One percent increase for retired state employees

    • The State’s contribution to the Teachers’ and State Employees’ Retirement System will increase to fund the Annual Required Contribution, providing a 1.0% cost-of-living adjustment to retirees.  The total cost of this is $45.5 million.

  • In-State tuition for military veterans and dependents attending a UNC System school.

  • Film incentives capped at $10 million (previously it was capped at $20 million) per production

  • Zero dollars appropriated to the Savings Reserve fund

  • Zero dollars appropriated to the Repairs and Renovations fund, but many projects within R&R will be funded through two-thirds bonds

  • State Bureau of Investigation transferred from the Justice Department to Department of Public Safety

  • ABC Commission transferred the from the Commerce Department to the Department of Public Safety

There are many more items than I mention in this newsletter.  If you want to take a look for yourself, you should check out the money report, where all the spending is outlined or the budget bill itself, which includes all spending as well as any changes to government policy.

Overall the budget spends $21.1 billion, which is a 2.2 percent increase from the last fiscal year.  Announcements have already been made that the legislature will reconvene in mid-August for a debate on coal ash and possibly a veto override.  They will also meet the week of November 17th to discuss a reform to the state’s Medicaid program.  So the fact that the budget negotiations will be over soon does not mean state legislators are done.  There is a lot more to come from the legislature in 2015.

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