Pricey Harrison

Friday, July 22, 2005

Budget Update 07-22-05

The House and Senate approved a second temporary budget bill by unanimous votes to keep state government running through August 5, 2005, in order to give budget negotiators additional time to reach a compromise on the approximately $17 billion spending plan. The "continuing resolution" also provides more than $205 million in education funding needed to hire new teachers and pay for other items to cover increasing fall enrollment in the public schools, University of North Carolina, and community colleges.

Budget negotiators have reached a tentative agreement that would maintain the current sales tax and personal income tax on individuals making an average of $800,000 a year, but continue to discuss the state's cigarette tax, debating between a 35-cent tax increase preferred by the Senate, and a 25-cent tax increase preferred by the House.

The other main points of contention between House and Senate budget negotiators are adequate pay raises for teachers and state employees, the state health plan, repayment to the state retirement plan, and Medicaid coverage for the blind, disabled, and elderly, which was cut in the Senate budget. However, we remain committed to taking care of teachers and state employees, and not balancing the budget on the backs of our most vulnerable citizens.

Governor Mike Easley also issued an executive order on Wednesday to spend up to $75 million on additional educational efforts across the state. House and Senate leaders and budget negotiators said that most of the programs included in the executive order were generally agreed to in negotiations.

The order instructs the State Budget Office to dedicate the following funding:
* $22.5 million to continue a fund for disadvantaged students in 16 of the state's poorest districts. Governor Easley initiated funding for that purpose last year;
* A $16.6 million increase in money the state distributes to about 70 "low wealth" school districts, where local resources for schools fall below the state average. Last year, those districts got $109 million;
* $16.6 million to expand the state's pre-kindergarten More at Four program, which will increase enrollment capacity for 4-year-olds by 3,200. Last year, the program received approximately $49 million and reached about 13,600 children;
* Nearly $6 million on high school reform projects, including 15 small-scale "Learn and Earn" schools that will be cooperative ventures with community colleges. There will also be 11 other smaller high schools oriented toward particular economic-development themes, such as health science; and
* $11 million for an initiative to open 100 school-based child and family support teams through the N.C. Department of Health and Human Services.

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