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  • Carolina Journal

Proposed House budget includes raises for state employees


THERESA OPEKA

Carolinal Journal


The House released its proposed state budget Monday night, including raises for state employees.


Under the proposal, all state agency employees would see pay increases. State agency employee salaries would increase by an additional 1% from fiscal year 2023 to 2024, jumping from 3% initially planned to 4%. 


Members of the Council of State would also see a slight salary increase.


The governor’s salary would go from $203,073 to $205,054 a year. The remaining members, including lieutenant governor, attorney general, secretary of state, state treasurer, state auditor, superintendent of public instruction, agriculture commissioner, insurance commissioner, and labor commissioner, would see their salaries go from $168,384 to $169,958 yearly.


Executive Branch officials like the state controller would see their salaries jump from $196,119 to $198,023, as would the chairman of the utilities commission, $175,765 to $177,472 39, and the state fire marshal, a newly created position as of Jan. 1, $139,050 to $140,400.


The state insurance commissioner had served as the state fire marshal since the 1940s, but under the state budget that was passed in September and part of S.B. 363, and later, S.B. 409, an independent office of the state fire marshal was created and housed within the insurance department. The insurance commissioner now appoints the fire marshal, and the legislature confirms it.


JUDICIAL AND LAW ENFORCEMENT

Judicial branch officials would also see a slight bump in their salaries. The Supreme Court chief justice would go from $203,073 a year to $205,054, and the associate justice would go from $197,802 to $199,732.


State employees certified in the Department of Adult Corrections (DAC) would see the largest pay raise with the budget adjustment amid staffing shortages. These include correctional officers, probation and parole officers, and DPS juvenile justice positions, all of which were initially scheduled to receive a 4% raise. However, under the proposed 9% addition, their pay would rise by about 12% from fiscal year 2023 to 2024.


Others, like state police and State Highway Patrol, would see a slight increase in pay.


EDUCATION PAY

On the teacher pay front, the proposed teacher salary schedule for the upcoming school year boosts starting teacher pay to $44,000 per year. The average teacher salary increase amounts to 4.4%.


Some other notable changes in the budget include Education Lottery funding.

Money for non-instructional support personnel would increase from $385,914,455 to $406,914,455 and the fund for public school repair & renovation would double from $50 million to $100 million. The total allocation would go from $935,000,000 to $1,006,000,000.


SPORTS BETTING

In sports wagering, people could place a bet on bull riding as the House budget recognizes it as a professional sport, along with baseball, men’s soccer, women’s soccer, basketball, football, and ice hockey.


NC State and UNC-Chapel Hill, which were excluded from receiving any sports betting proceeds in the previous budget, are now included as revenue projections were better than expected.


Along with Appalachian State University, East Carolina University, North Carolina A&T, and UNC-Charlotte, they would split 5% of tax revenue from sports betting after initial distributions were paid.


The tax proceeds from sports betting to the North Carolina Youth Outdoor Engagement Commission would increase from $1 million to $6 million in this budget for grants that would assist in things like travel to out-of-state sporting events.


Also, 30% of the proceeds would go toward the North Carolina Major Events, Games, and Attractions Fun established under G.S. 143B-437.112. 22 c. It is currently at 25%.

The remainder of tax proceeds would go to the General Fund.


STATE BOARD OF ELECTIONS

The State Board of Elections would also get some help with the House budget. It includes $5.6 million to update the State Elections Information Management System (SEIMS), the data management system for voter registration and voting data), and their campaign finance reporting system.


The funding is part of a multi-year, $13.6 million upgrade that is needed because both systems are outdated.


STATE HEALTH PLAN

State retirees would see a 2% cost of living (COLA) bonus in the budget.

There were also some changes to the state’s employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries.


However, there was no extra funding for the State Health Plan (SHP) as State Treasurer Dale Folwell requested.


He told Council of State members and reporters earlier this month that the SHP was in dire need and would need emergency funding sooner than later, thanks to hospitals overcharging state employees for cancer drugs, changes with the Medicare Advantage plans, not being fully reimbursed for COVID-19-related health costs by the General Assembly and past costs for weight loss drugs.


“Our priorities are pretty simple,” Folwell told Carolina Journal in a phone interview Tuesday. “The money necessary to pay first, interest on the small amount of remaining general obligation debt, fully funding the pension plan, and fully funding the State Health Plan.”


He said last week that the FY 2023-25 State Budget funded the SHP by $240 million less than requested and that the Plan incurred $313 million in unreimbursed COVID costs.


Ending coverage for the weight loss drugs on April 1 reduced the shortfall for the SHP to $89 million. But, the Medicare Advantage premium increase contributed an additional $66 million that was needed, bringing the total deficit to $155 million.


The North Carolina State Health Plan Board of Trustees voted on June 6 to increase monthly premiums for 4,200 not fully vested retirees and 22,000 dependents from $0 to $33 starting on January 1. Another 160,000 retired members will not see any increase, nor will active employees.


Folwell told CJ they haven’t seen any evidence that the House budget contains anything they requested.


“It’s concerning because, unlike the federal government, we actually have to balance our budget, and we can’t print money, and healthcare, insurance, and prescription drug costs are going through the roof,” he said. “This is money that the General Assembly has received from our federal government for these types of expenses.”


There also wasn’t anything in the budget regarding the framework for draft legislation that Folwell introduced in May that would give a monthly $25 employer match for nearly 350,000 active members in the Teachers’ and State Employees’ Retirement System (TSERS), Consolidated Judicial Retirement System (CJRS), Legislative Retirement System (LRS), and the Optional Retirement Program (ORP).  The legislation would attempt to close the 40% participation gap between state and local employees.


WHAT NOW?

If the Senate chooses to negotiate, the budget proposal will likely undergo several rounds of changes, but Senate leadership remains skeptical of overspending. 


Senate Leader Phil Berger, R-Rockingham, told the Carolina Journal that the House is not only overspending, but also using funds from reserve accounts to fund non-essential projects, which he opposed.  


If no agreement can be reached, the current biennial budget passed in 2023 would remain in place.


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