*This post has been updated to reflect comments from Senate budget writer Harry Brown indicating that all state employees AND teachers will receive $750 bonuses during the 2015-16 fiscal year.

The News & Observer is reporting that House and Senate leaders have reached an agreement on how much to pay teachers and state employees for this fiscal year, nearly two months after their June 30 deadline for making these decisions.

All state employees, including teachers, will receive $750 bonuses toward the end of 2015, said Sen. Harry Brown (R-Onslow). That amounts to $62.50 per month, before taxes.

Making good on last year’s promise, beginning teachers will also see their base pay rise to $35,000 per year, up from $33,000 that was enacted last year.

Experienced teachers will also receive step increases, presumably as laid out in the state’s streamlined salary schedule, which lawmakers enacted last year—although budget documents detailing the step increases were not made available Wednesday. (See here for the 2014-15 salary schedule.)

It’s unclear whether teachers who are scheduled for step increases as well as beginning teachers will be paid retroactively beginning with the July 1 start of the fiscal year.

A spokeswoman for House Speaker Tim Moore said their priority will be to focus on “shoring up funds so we can give meaningful raises” next year, according to the N&O.

For a teacher with 15 years of experience and a bachelor’s degree, receiving a step increase will mean jumping up from a base salary of $40,000 to $43,500 (excluding local supplements). Step increases for teachers are scheduled every five years, stopping at year 25 and capping base salary at $50,000.

WRAL reports that budget negotiators are still discussing how much of a pay increase to give state retirees. And there’s no resolution yet about teacher assistants—the Senate wants to slash 8,500+ TA jobs in exchange for reducing classroom size, while the House wants to preserve those positions.

House Speaker Tim Moore announced Wednesday that the General Assembly will pass a third continuing resolution tomorrow. The measure, which will keep state government operations running as lawmakers finalize a budget, will run through September 18—although they hope to reach a final agreement sooner, at which time the above mentioned raises & bonuses will be set in law.


“I feel like our kids are being held hostage by the General Assembly’s lack of a budget.”

That’s the word from Yancey County Schools’ superintendent Tony Tipton, who says that lawmakers’ failure to reach a deal on a two year state budget means students haven’t been able to learn how to drive over the summer.

From the Asheville Citizen-Times:

The other big wild card in school funding this year is whether the state will continue paying for driver’s education classes. The Senate budget would eliminate funding and the House would continue it.

That has left many WNC school officials reluctant to continue their driver’s ed programs past the end of the 2014-15 fiscal year June 30 for fear that they would have to pay all of the cost with local funds.

Some systems stopped classroom instruction but allowed students who had completed classwork to get in their time behind the wheel. Others just halted their programs altogether, said Lee Roy Ledford, head of a private company that employs 60 people providing driver’s ed instruction in nine WNC school systems.

“Probably half of our faculty or staff is sitting idle right now,” he said.

“I get calls every day from parents: ‘What about my kids’ driving?’ ” Tipton said. “I feel like our kids are being held hostage by the General Assembly’s lack of a budget.”

Both Jackson and Buncombe schools said they are looking at the prospect of charging $300 per student for driver’s ed if the Senate position prevails.

Teacher assistants are taking tough hits as well in Western NC.

The General Assembly has steadily cut funding for teacher assistants in recent years. Jackson schools at first were able to use local money to keep from laying off assistants, but eventually Murray said he decided, “That is a bleeding wound that I can’t keep let happen,” and had to make adjustments.

Assistants now don’t work when school is not in session. Many also work in school lunchrooms or drive buses to piece together enough hours to be full-time employees.

More than 60 percent of school funding in North Carolina comes from the state. WNC school officials say local sources of funds have already been stretched to fill in for previous state funding shortfalls.

Scared off by the prospect of potentially losing their jobs each year, many TAs have left their jobs voluntarily in Yancey County.

Keeping assistants has already become more difficult than it should be because the General Assembly seems to argue every year over how many to pay for, Tipton said.

“Over the last six years, some of ours have left and said it’s just too disheartening” to wonder each summer whether they will have a job when school begins, he said.

Read the full story on the effects of the NCGA’s budget stalemate here.


Last week the Senate released its latest version of Medicaid reform calling it a compromise measure with the House. There are some changes to the Senate’s original proposal.

Under the amended plan a new Department of Medicaid is created but it remains within the Governor’s purview. It also allows for regional provider led entities to compete for Medicaid contracts with statewide managed care companies. For the most part, however, the bill is a radical revamping of Medicaid. It is difficult to see how adding all of this complexity will increase predictability. Instead, this restructuring creates a system with many moving parts that will require a new oversight regime. In the end patients are likely to get pinched between gaps in this structure and the state will spend time and money tracking problems and pursuing legal claims against private insurance companies.

Due to consolidations in the industry there are not many insurance companies that will bid to control Medicaid delivery in the state. Companies like Amerigroup and Centene and United HealthCare will likely get contracts under the Senate plan. North Carolina will get glittery promises and great deals in the first year. Then the problems will start.

Whether it’s discriminating against pregnant women, or improperly denying speech-therapy services for children, or denying patients timely access to critical medical services,  or delaying payments to doctors and hospitals, or pulling out of a state before completion of a contract, private managed care companies introduce a  great deal of uncertainty.

Although the Senate allows regional provider led entities to form, these organizations have major disadvantages when trying to compete with large corporations. The provider groups, for example, must meet the solvency requirements of a private insurance company. They must also move within a year to take on full risk. That means if they give too much care at too much cost the providers are stuck. They only get the amount of money they originally budgeted. This is not a huge problem for an insurance company with billions in revenue. It is more difficult for a small collection of rural clinics and hospitals. Also, if a big insurer is losing money it can pull out of the state never to return. Not so with a doctor’s office.

The Senate persists in wanting to end contracts with Community Care of North Carolina, our state’s Medicaid medical home model that has won national recognition.

It is difficult to see what problem the Senate hopes to solve by injecting so much complexity and uncertainty into the system. Trying to negotiate with large insurance companies and regional provider entities will introduce opportunities for fraud, waste, and abuse. It will also mean a major loss of state control over our Medicaid program.

The biggest beef legislators have had with Medicaid is the agency’s difficulty in projecting costs. Now that private insurance companies are having to deal with constant policy change, and now that they can’t cherry pick customers, we are seeing that they also have trouble predicting costs. Tearing down our entire Medicaid structure to get more reliable budget numbers seems like a bit much. We could, after all, move to a full-risk capitation model using provider agreements and CCNC.

Ultimately, the most short-sighted part of both the House and Senate proposals is that neither includes expanding Medicaid eligibility. Most states across the country are now expanding and reforming Medicaid at the same time. This allows governors to negotiate more conservative reform deals with the federal government. If we are going to ask patients and providers to undergo a painful reform process we could at least cover more people.

Paul Stam 2

Rep. Skip Stam (R-Wake)

Rep. Skip Stam (R-Wake) told WPTF on Thursday that despite stalled budget talks that have kept the state waiting a month past the deadline for a deal that spells out how the government should run its schools and other agencies, North Carolinians should take heart — everything is running smoothly.

“Every other time I’ve been down here where there was a [budget] delay, they would fund the government you know at 80 or 90 percent of [the] last year,” Stam told WPTF radio host Patrick Johnson yesterday morning.

“This time it’s being funded at 100 percent plus of last year’s budget, so nothing is being shortchanged,” said Stam. “You know, pay raises will be — whatever they end up being — will be retroactive to July 1, but it’s not like the operation of government is being affected.”

Stam’s assessment of how the state is coping with operating under a stopgap measure while lawmakers do battle over a 2015-17 budget agreement doesn’t quite line up with what I’m hearing is happening on the ground.

Public schools are trying to figure out how to staff their schools in the face of potentially having to lay off more than 8,500 teacher assistants over the next two years—and they are still unsure of how much their staff will even earn this fall.

“We are getting ready to open our classroom doors. … And we don’t have a clue yet if we’re going to have to (lay off) 500 teacher assistants or try to hire almost 140 new teachers,” Charlotte-Mecklenburg’s school board member Tim Morgan, a Republican, said at a recent meeting.

While a continuing resolution to keep government operations funded is in place through August 14, Rep. Larry Hall questioned chief budget writer Rep. Nelson Dollar (R-Cary) this week about whether or not teacher assistants are funded at the same level as last year until a budget deal is reached.

Dollar said to his knowledge, TAs were funded at the same level as last year. But when Hall asked legislative staff to weigh in, they said not quite—more than $20 million that funded TAs last year were non-recurring dollars, which means local districts didn’t get those funds to use while a continuing resolution is in place, putting more stress on their local budgets.

Wake County Schools Superintendent Jim Merrill offered a sharp rebuke to lawmakers at a public hearing on the budget convened Wednesday of this week by the House.

“Our students cannot wait for the various levels of government to conclude a budget negotiation,” said Merrill. “You’re currently debating whether to provide money that’s already been spent on tens of thousands of students. We simply can’t un-spend that money once negotiations end and the final budget is decided.”

Also at issue? Driver’s education. House lawmakers appeared this week to be unlikely to waver on their position of keeping driver’s ed fully funded, whereas the Senate is proposing to abandon funding driver’s ed altogether and eliminate the requirement for driver training in order to get a license.

The uncertainty around driver’s education has prompted some local school districts to cancel their summer driving schools—especially problematic in places where the bulk of driver training happens during the summer.

All indications point to lawmakers having to pass a second continuing resolution to keep government operations running past August 14.

“We’d all like to get out of here sooner rather than later, but I’m afraid it is gonna take a while,” Rep. Stam told WPTF, “just because there are so many disagreements.”


If local school boards need a way to hold county commissions accountable when it comes to providing sufficient local funds for schools, they may soon lose a key feather in their hats — the ability to sue.

Senate lawmakers passed an amended House bill Wednesday that strips local school boards of their ability to sue the county in the event they believe the commissioners should provide more local funds for the district’s schools.

Similar to a bill that was defeated in the House earlier in the legislative session, NC School Boards Association lobbyist Leanne Winner says the current measure would change the dynamic in local communities when it comes to negotiating local budgets.

“School boards are the only elected body in North Carolina that doesn’t have ability to raise its own revenue,” said Winner. “School boards are also the body to which the state has given responsibility to provide the opportunity for children to receive a sound basic education. If a school board doesn’t have resources necessary to do that, there has to be some kind of mechanism available to be able to deal with those financial issues.”

Senator Dan Soucek (R-Watauga) amended HB 561 quietly on the Senate floor Tuesday to strip the school boards of their power to sue county commissions for the next five years, citing a need for a “cooling off period” between local governments and school boards. Other supporters of the bill say it’s a waste of money for counties to sue themselves.

In 2013, the Union County school board sued the county over a budget dispute which resulted in a $91 judgment that was overturned by an appellate court.

Winner says it’s important for school boards to have the possibility of litigation as a negotiating tactic when working on a local budget.

“While the process is not used very often, the notion that it exists helps bring people to the table to to do more for their community,” said Winner.

Without a way to push county commissions to sufficiently fund public schools, local school boards will have to rely even more on the state’s coffers to fulfill their constitutional requirement to provide the opportunity for a sound basic education for all.

North Carolina has seen state-funded per pupil investment fall considerably over the past several years. Since 2008, per pupil funding has dropped nearly 15 percent according to the Center on Budget and Public Policy, ranking among the lowest in the nation.

The Senate version of the bill must now go back to the House for concurrence. Given House lawmakers’ defeat of a similar measure earlier this session, it’s unclear if a second attempt will prove successful.