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Tuesday, July 29, 2014

Budget miscalculations could affect teacher raises

Posted By on Tue, Jul 29, 2014 at 10:37 AM

No one likes getting bad news on a Friday. But that’s what happened last week to your elected leaders serving in the General Assembly — and what happened to you, too, only you might not have heard.

According to key legislative economists, North Carolina’s budget is much farther off projections than was thought just a few weeks ago. What had previously been expected to be a $475 million shortfall in collected tax revenue for 2014 has now been revised to $690 million. And the cost for the 2015 tax year is also projected to be $200 million higher than the original estimate, or about $900 million short. As a result, all talk of any teacher pay increases or other budgetary items should be completely off the table for the current “special session,” if they were trying to balance the budget. The session has already dragged on almost a month past the end of the last fiscal year.

Those shortfalls are the result of changes to tax laws passed last year by the Republican-dominated legislature, which critics say considered the rich and corporate interests over “average” citizens. At the time, Republican projections were that the lower tax rates would spur economic growth, which, in turn, would increase tax revenue. The latest figures negated that theory.

Which leaves many programs in even greater jeopardy, in what was already a legislature at odds with itself, and the governor, over priorities and promises, teacher pay raises being at the top of that list.

The latest reported negotiations between the state House and Senate last week indicated that a compromise had been reached to provide a 7 percent average teacher pay increase for the coming school year, much less than many had hoped for, or had been proposed as recently as a few weeks ago. But that increase will still cost the state about $265 million, which is greater than the upward revision in the budget shortfall for this year alone, let alone next year. How, then, could the legislators still give teachers that raise?

“Those projections certainly should affect that raise, if you’re going to be a responsible legislator who’s making appropriations ... but the Republicans up here are going ahead with this as an election-year ploy, and are saying, ‘We’ll worry about it next year,’ but none of this is sustainable,” state Sen. Joel Ford, D-Mecklenburg, told me this morning.

Senate leader Phil Berger, a Republican, told the Associated Press Monday that both chambers of the General Assembly were “working together” to finalize the revised budget for a vote this week, and he hoped the Senate would have a draft to consider by Thursday. But he would not provide any details, other than to say it included “some reforms” as to how teachers are paid.

“What we know for sure is that there’s a budget shortfall with an impact that will hit over the coming year,” Ford said. “But the tax cuts passed last year by the Republicans have not spurred on the economic growth they anticipated. That’s what we do know.”

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