McCrory's budget: Cautious, Solid, Optimistic

Governor Pat McCrory presented his first budget proposal and it was pretty consistent with what he advocated while running for governor, emphasizing economy, education and efficiency. I’ve sat through many budget presentations and have to admit McCrory acquitted himself well. We saw the moderate McCrory, cautious about wild spending sprees but also cognizant of the need to spend in key areas.

His presentation was optimistic but mindful of where our state is at this moment. There was solid evidence that he had consulted with legislative leadership, education officials, Council of State members and agency heads in crafting this 300-plus page recommendation. We were especially impressed with budget director Art Pope’s knowledge of the budget and businesslike approach to budget priorities. There’s something for everyone to like and whereas some would have wanted a more progressive posture, with only 11 weeks on the job it reflects real understanding in state government and McCrory’s priorities. Overall, it was much better than we’ve seen from recent first-year governors. Surprisingly, even liberal Democrats have to admit he took a reasoned approach, increasing spending by roughly half a billion dollars over the present budget, largely funded by a conservative 3.6 percent increase in projected revenue growth and by targeted savings. We can argue over spending cuts but this budget is pretty solid. There are no tax increases but neither did we see the drastic budget cuts some had projected.

McCrory began his presentation with the need to preserve and repair current state buildings which were largely neglected during the recession, adding some 300 million over the next two years for repair and renovation. It’s not sexy but the governor wants us prepared for the event of another economic downswing by beefing up our rainy day fund to smooth out the wild revenue swings we have seen during those turns and the future possible effects of Sequestration, which no one can predict.

The 20.6 billion dollar General Fund proposal makes a genuine effort to fund education by adding slots for 5,000 at-risk children in pre-k programs, the children who often start off behind and never catch up. It makes a start at funding digital learning, hires 1,800 new certified teachers and gives them, along with all state employees, a 1 percent increase in salary. Some will be critical after the recent report showing we are 48^th in the nation in teacher pay, but 1 percent is better than nothing. It also eliminates teachers’ aides in early grades. Community Colleges see a small decrease, largely based on expected enrollment decreases, but McCrory does include money for high-cost in-demand training and voices support for the role Community Colleges play in preparing people to work.

The University System doesn’t fare so well, although the governor is quick to say their overall funding from the state will be about what it is this year. McCrory voiced concerns over student debt, saying this is no time for tuition increases for in-state students. Out-of-state students are another matter. His budget includes 63 million to help the system implement its five-year strategic plan.

He restores 7 million dollars for the drug courts, acknowledged by most to be an effective tool in helping those addicted. His recommendation for full funding of Medicaid is an acknowledgement that recent legislative cuts were unrealistic and unattainable. Closing 5 prisons is a step toward greater efficiency and rather than close 5 under-visited historic sites he chooses to declare them shuttered and dormant. Many of the 900 projected state job cuts come from prisons and historic sites. Some will criticize the elimination of the tax check-off to fund judicial and other elections, but many question their value. And we were disappointed that the NC Rural Center would be cut 10 million dollars. They have a track record of helping small communities, even though the governor proposed a small sum to help main street North Carolina.

The governor essentially deferred discussion of tax reform, saying his budget is revenue neutral and tax reforms should reflect that point. He will be criticized for eliminating estate taxes for the wealthy while, at the same time, the state cuts the earned income tax credit for the poor. And his budget doesn’t address the number one issue in last year’s election, jobs. To achieve his campaign goals of bringing our 9.5 percent unemployment rate below that of neighboring South Carolina will require the creation of thousands of new jobs. But, as he said, we need to get state government on a solid footing before embarking on major initiatives.

This reporter questioned the lack of a solid public infrastructure improvement plan, but McCrory astutely responded that he had only been in office 11 weeks and we got the impression that is coming, with DOT Secretary Tata soon to propose a 25 year transportation improvement plan.

McCrory alluded to consolidations, increased efficiencies and reductions in state agencies through GEAR, a government efficiency and reorganization plan, to be presented to the General Assembly and suggested the never-enacted GPAC proposals under Governor Martin would be dusted off and implemented where wise.

How will the legislature respond to these proposals? Judging by early responses from House Speaker Tillis and Senate President Pro Tem Berger they will get more than the dead-on-arrival reception recent gubernatorial budget proposals have received. Few will be overjoyed by McCrory’s budget but most will be pleasantly surprised that in such a short time he has done such a solid job.