North Carolina General Assembly Week in Review

March 6, 2015

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Governor McCrory Proposes $21.5 Billion Budget

North Carolina Governor Pat McCrory (R-NC) unveiled his 2015-2017 budgetproposal on Thursday, focusing heavily on job creation, education andinfrastructure. Speaking at the Old State Capitol Building in downtown Raleighprior to releasing his plan for the state, the governor said, “We have had tomake tough choices to arrive at this comprehensive, thoughtful proposal, and I’mproud of what we will accomplish through it. The issues our state faces each andevery day are thoroughly addressed in this budget, with the priorities of ourcitizens accurately reflected.”


North Carolina taxpayers have historically made a tremendous financialcommitment to education, and this budget continues to build on that legacy. Morethan $12 billion of General Fund monies will be spent on K-12 education in eachyear of the biennium. Additionally, Governor McCrory proposes spending $111.4million in each year of the biennium to increase teacher base pay to $35,000 peryear and to increase funds for teachers eligible to move to the next tier on thesalary schedule. To support enrollment growth, the budget sets forth anambitious plan for hiring 1,400 new teachers over the biennium, as well asallocating $128 million to maintain teaching assistant positions over the sametime period.

Governor McCrory plans to reward high-performing teachers in this budget byappropriating $15 million over the biennium to implement teacher pay forperformance plans. Additionally, North Carolina’s Pre-K program will expand toaccommodate 26,800 at-risk four-year-olds. The proposed budget also invests $5million for community colleges to purchase current, up-to-date equipment andtechnology used to prepare students for STEM careers.

Health and Human Services

The budget recommends allocating $5.3 billion for the Department of Healthand Human Services in 2015-16, and $5.5 billion in 2016-17. That is up from $5.1billion in the current fiscal year. The $10.8 billion two-year appropriationrepresents nearly one-quarter of the entire budget. Of that amount, $7.8billion, or 18 percent of the General Fund budget, is dedicated to Medicaid. Thefederal insurance program for the poor and disabled is projected to grow $287million in the first year of the biennium, and $460.6 million in year two due tohigher enrollment, higher utilization of services, and anticipated costs perparticipant.

Despite pleas from some state and national advocacy groups, McCrory chose notto include funding to expand the government insurance program for the poor anddisabled, saying at a news conference “we recognize the Supreme Court case couldhave major ramifications on everything related to health care, includingMedicaid.” The budget does earmark $175 million in a Medicaid Risk Reserve tohelp offset any budget overruns and includes nearly $82 million over thebiennium in new funding for mental health and substance abuse services.


The budget commits nearly $4.8 billion to lay the foundation for GovernorMcCrory’s 25-year transportation vision, which focuses on connecting small townsand economic centers to simplify citizens’ commutes for work, school andrecreation. This includes an increase of $135 million for criticalinfrastructure investments; $51 million for road preservation and improvements;$36 million for capital repairs and renovations and $10 million to easecongestion in rural and small urban areas.

Following through on a promise made in his State of the State address lastmonth, the governor requests a transportation bond of $1.2 to $1.4 billion forquicker construction of projects. Governor McCrory is asking for a $1.4 billiongeneral obligation bond to revitalize blighted state buildings and to build new,workable and efficient facilities for the National Guard, community colleges andother agencies.

Job Creation

The 2015-2017 budget restores and reforms the Historic Preservation TaxCredit, designed to revitalize main streets across North Carolina. In addition,Governor McCrory provides funds for his Innovation to Jobs Initiative, which wascreated to convert more university research dollars into products and servicesthat are patented and introduced into the marketplace. To support thisinitiative, the governor plans to invest $15 million in each year of thebiennium in the Venture Multiplier Fund. This capital will be invested alongsideprivate sector dollars in early stage commercial ventures. The budget alsoprovides $2.5 million in recurring money for the Rallying Investors and SkilledEntrepreneurs Program, an initiative of the McCrory Administration whose chargeis to develop and leverage existing entrepreneurial management talent andrecruit world-class investors to the state.

In addition, Governor McCrory’s budget creates the University InnovationCommercialization Investment program, funded at $7.5 million during the next twobudget years and recommends $5 million for the One North Carolina Small BusinessProgram to provide early-stage funding for small, high-growth businesses.Additionally, it appropriates $10 million in each year of the biennium toencourage the production of long-term, sustainable film projects and to furtherdevelop the film-making industry.

Military and Police

Governor McCrory proposes to fund in-state tuition for nonresident militaryveterans at institutions within the UNC system and the state’s 58 communitycolleges. Moreover, he plans to coordinate and centralize services for militarycommunities, active duty personnel and veterans by creating the Department ofMilitary and Veterans Affairs at no additional cost. The department will becharged with reorganizing programs that protect and advocate on behalf ofmilitary bases, promoting the health and safety of North Carolina’s veterans andconnecting the veteran population to jobs.

Notably, the budget funds the full five percent step increase for eligibleState Troopers in each year of the biennium and provides additional funding toimprove crime lab operations and reduce criminal case backlogs. It alsoallocates $21 million in funding to help compensate and retain the state’scorrections officers and their supervisors.

Streamlining Government Operations

In order to continue customer service improvements at the Division of MotorVehicles, $30 million is budgeted for technology and equipment modernization.
Future workers’ compensation costs will be reduced through consolidatedreporting and an overall improvement in case management to protect against fraudand abuse.
Popular statewide attractions such as the North Carolina Zoo, state aquariums,museums and state parks will be transferred from the Department of Environmentand Natural Resources to the Department of Cultural Resources, which managesattractions as part of its mission.

Advocacy groups will be moved from the Department of Administration to theGovernor’s Office. To strengthen the Veteran Affairs and the Office of theMilitary Advisor, the budget proposes the creation of the Department of Militaryand Veterans Affairs


Click here to view theGovernor’s proposed 2015-17 Budget


Senior Vice President 

Senior Vice President 

Franklin Freeman
Senior Vice President 

Bo Heath
Senior Vice President 

John Merritt
Senior Vice President 

Senior Vice President 

Kerri Burke
Vice President 

Assistant Vice President 

Sarah Wolfe
Assistant Vice President 

Philip Barefoot
Research Assistant