Senate Republicans defend budget choices

The Associated Press

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RALEIGH — North Carolina Senate Republicans on Thursday defended their proposed public school funding cuts that would pay for teacher raises and detailed their own plan to change Medicaid, rejecting GOP Gov. Pat McCrory’s reform blueprint.

The $21.2 billion spending plan for the year beginning July 1 cleared three committees on the way to the first of two required floor votes Friday.

While Republicans promoted the budget for offering veteran teachers pay raises above 10 percent, they also had to find the $468 million to fund the raises. They made line-item cuts totaling $390 million, of which more than half came from reducing funds that school districts could otherwise use to hire 7,400 teacher assistants.

The Department of Public Instruction, which helps administer the schools from Raleigh, also would have to cut expenses by 30 percent, or $15 million.

“That’s just the way it is. If you want to put teacher raises at the all-time high, which we’re doing, you’ve got to find $470 million somewhere,” Sen. Jerry Tillman, R-Randolph, told the Senate Appropriations Committee.

The budget proposal would keep funding for teacher assistants in kindergarten and first grade, but eliminate funds for assistants for second and third-graders. Republicans said districts still have flexibility to pay for assistants in the older students’ classrooms.

Tillman suggested the Department of Public Instruction is a bloated bureaucracy whose employees perform services that many districts now do for themselves. But he acknowledges some vital services would be curtailed.

The North Carolina Association of School Administrators estimated the Senate budget could result in the loss of 10,000 school-related jobs, including 1,000 employees in school district offices.

The pay raises, announced Wednesday before the budget’s release, would give an 11.2 percent average increase for veteran teachers, but only for those who voluntarily give up their tenure. Those who don’t would be left on the current salary schedule with little or no pay raise, Republicans said.

Democrats offered no amendments to counter the public school changes. But in a release Thursday, Senate Minority Leader Dan Blue, D-Wake, said the proposal “merely plays shell games with classroom resources. Our students, parents, and teachers deserve better than this plan.”

The North Carolina Association of Educators, which sued successfully to challenge a Republican law last year to phase out tenure protections, blasted the proposal as additional details were released. The proposal would make it risky for NCAE to sue again. The budget says all teachers would be forced onto the lower current pay schedule should the new schedule be challenged struck down in court.

“So even if we win in court, the legislature says teachers lose,” NCAE President Rodney Ellis said.

Senate Republicans also discussed in the budget their own multiyear path to reorganize the state Medicaid office, rather than embrace McCrory’s proposal to create “accountable care organizations” of doctor and hospital networks that would share in Medicaid savings and overruns.

Such organizations were projected by 2020 to save Medicaid up to 3 percent of the program’s cost, now at more than $3.6 billion in state funds. Senators have said that’s not good enough to rein in Medicaid costs and avoid shortfalls.

The legislature created a Medicaid advisory board to help the state Department of Health and Human Services develop a reform plan that was supposed to provide budget predictability and handle physical and mental health needs. The finished product provided neither, said Sen. Ralph Hise, R-Mitchell.

The Senate over time would probably move the Medicaid out of DHHS and form an independent agency, or place it within the governor’s office, said Sen. Louis Pate, R-Wayne, who served on the advisory board. He said the new entity could serve as its own insurance program, or a private or nonprofit organization could be hired to manage the plan.

“I think we need to look at all options,” Pate said.

McCrory told reporters he had “very serious concerns” about the budget in several areas, including at DHHS and in education.

Doctors and hospital groups that have supported the accountable care organization concept also raised warnings.

“The Senate’s budget proposal offers no solution to the big challenges we’re facing in Medicaid,” North Carolina Medical Society Executive Director Robert Seligson said.