Teachers and state employees lose in budget compromise

by Chris Fitzsimon, NC Policy Watch and NC SPIN panelist, August 20, 2015.

Much of the discussion about the Senate’s unfortunate decision to the pass the misnamed Taxpayer Bill of Rights, or TABOR, has understandably focused on the massive problems the arbitrary spending limits have caused in Colorado, the only state to adopt them.

Colorado plummeted in national rankings on a host of indicators after adopting TABOR, education funding, teacher pay, and child welfare among them.

But folks in North Carolina wondering what the ridiculous amendment would mean here don’t have to look only at Colorado anymore. This year’s budget negotiations between the House and Senate provide more evidence that TABOR would be a disaster for our state and make it impossible for lawmakers to make the public investments the state needs and the public supports.

House and Senate budget leaders recently announced they had agreed on a spending level for next year of $21.74 billion, a figure closer to the Senate’s original budget that the spending level the House approved.

The new number is roughly $85 million more than would be allowed if TABOR was already in effect in North Carolina and roughly $500 million more than the state spent in the last fiscal year, which has absurdly already set off alarms in Tea Party land that the General Assembly is on some sort of spending spree.

The amount is also more than Gov. McCrory proposed in his budget that he submitted earlier this spring and as analysts at the N.C. Budget & Center noted at the time, the entire amount of the spending increase proposed by the governor would have to pay for enrollment growth in public schools, universities and Medicaid programs.

Those basic inflationary increases that the House and Senate must also fund come to roughly $440 million. They also make up almost all the spending capacity that would be available to lawmakers if TABOR was already in effect.

Any meaningful raise for teachers and state employees would be off the table. A one percent pay hike for all teachers and state employees cost $135 million.

That means that under TABOR and under the spending limits recently adopted by the House and Senate budget leaders, there is not enough revenue available to cover inflationary enrollment increases and give state teachers and state workers a modest two percent increase unless lawmakers make significant budget cuts elsewhere.

This year’s Senate budget provides a graphic example of that. Senate leaders want to hire additional teachers to reduce class size in the early grades but want to pay for it by laying off 8,500 teacher assistants in the next two years.

State workers have barely received a raise at all in the last eight years and while teachers early in their careers have received significant increases in the last two budgets, many veteran teachers have received barely noticeable pay hikes and continue to fall further behind their counterparts in other states.

That would not change any time soon if the hard spending caps in TABOR were adopted. Largely frozen salaries would remain frozen and any big across the board increases to make up for the last several years would be out of the question.

So would any new meaningful investments in textbooks, early childhood programs, and higher education initiatives.

The state budget would be limited to staying the same for the most part, after paying for increased enrollment. And the effort to freeze it comes as the budget still lags far below pre-recession levels.

House leaders admitted recently that the spending limit agreed to for next year would make the two percent raise for all teachers and state workers included in the House budget unlikely.

And that’s with a budget that spends more than would be available if TABOR was already in effect.

No, we don’t need to look to Colorado to see what TABOR would mean for North Carolina. Teachers and state employees are seeing the damaging consequences right now in the budget debate in this year’s General Assembly.

- See more at: http://www.ncpolicywatch.com/2015/08/20/teachers-and-state-employees-lose-in-budget-compromise-that-foreshadows-tabor/#sthash.BN5x4X0q.dpuf