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McCrory Makes ‘Tough Choices’ in 2015-17 Budget Proposal Released on Thursday

Gov. McCrory
Gov. McCrory

N.C. Gov. Pat McCrory unveiled his 2015-2017 biennium budget proposal on Thursday.

Prior to releasing his plan for the state over the next two years, McCrory said, “We have had to make tough choices to arrive at this comprehensive, thoughtful budget proposal, and I’m proud of what we will accomplish through it. The issues our state faces each and every day are thoroughly addressed in this budget, with the priorities of our citizens accurately reflected.”

Liberal opponents of the plan noted that these “tough choices” were the result of “self-inflicted … harmful tax cuts.”

Read the governor’s plans via release from his office and highlights of the proposal, plus relevant responses below:

“Governor McCrory’s Plan Continues Commitment to North Carolina Families and Invests in Economic Opportunities”

Governor Pat McCrory’s 2015-2017 biennium budget continues his focus on job creation, education and infrastructure. It also increases help and protection for those that cannot help themselves while maintaining fiscal discipline and increasing government efficiency.

There are no tax increases in the governor’s budget.

“This budget builds on our hard-earned successes and lays the foundation for a bright future for all North Carolina families,” Governor McCrory said.“This budget recommits us to the basic values that make our state great. When we unleash our potential in education, transportation, energy and technology, and commit to greater government efficiency and affordability, North Carolina will be second to none.”

Job Creation

Separate from the budget, the governor is supporting legislative measures that will allocate $45 million for NC Competes and $20 million for the Site Infrastructure Development Fund, a fund designed to attract major manufacturing projects, such as an auto production plant.

Governor McCrory’s budget restores and reforms the Historic Preservation Tax Credit to continue to revitalize main streets across North Carolina while ensuring that the credits are used wisely and where they can have the most impact.

The Innovation to Jobs initiative was created to convert more university research dollars into products and services that are patented and introduced into the marketplace. To support this initiative, the governor’s budget invests $15 million in each year of the biennium in the Venture Multiplier Fund. This capital will be invested alongside private sector dollars in early stage commercial ventures. It also provides $2.5 million in recurring money for the Rallying Investors and Skilled Entrepreneurs, a program that will develop and leverage existing entrepreneurial management talent and recruit world-class investors and skilled entrepreneurs to the state.

Governor McCrory’s budget creates the University Innovation Commercialization Investment program, funded at $7.5 million during the next two budget years and recommends $5 million for the One North Carolina Small Business Program to provide early-stage funding for small, high-growth and high-tech businesses across the state.

It also appropriates $10 million in each year of the biennium to encourage the production of long-term, sustainable film projects and to further develop the film-making industry within the state.


North Carolina taxpayers have historically made a tremendous financial commitment to education, and this budget continues that legacy. More than $12 billion of General Fund monies will be spent on K-12 education in each year of the biennium. It allocates $235 million more in K-12 funding than the 2014-2015 budget—a 2.8 percent increase in spending.

As promised, $111.4 million in each year of the biennium will be spent for teacher salaries to increase teacher base pay to $35,000 a year. This allocation also funds increases for teachers eligible to move to the next tier on the salary schedule.

To support enrollment growth, this budget provides for the hiring of more than 1,400 new teachers over the biennium as well as provides $128 million to maintain teaching assistant positions over the same time period.

The budget also rewards high-performing teachers by appropriating $15 million over the biennium to implement teacher pay for performance plans.

More than $70 million over the biennium will be spent to buy textbooks, instructional supplies and equipment.

Additionally, North Carolina’s Pre-K program will expand to accommodate 26,800 at-risk four-year-olds.

The governor accelerates the talent pipeline by funding community college classes year-round, including in the summer, just like North Carolina businesses. The budget also invests $5 million for community colleges to purchase current, up-to-date equipment and technology used to prepare students for STEM careers.

Critical Infrastructure 

The budget commits nearly $4.8 billion to lay the foundation for Governor McCrory’s 25-year transportation vision, which focuses on connecting small towns and economic centers to simplify citizens’ commutes for work, school and recreation. This includes: an increase of $135 million for critical infrastructure investments; $51 million for road preservation and improvements; $36 million for capital repairs and renovations under the Capital Improvements plan and $10 million to ease congestion in rural and small urban areas.

As the governor noted in his State of the State address, he will request a transportation bond of $1.2 to $1.4 billion for quicker construction of projects in the 25-year vision plan.

He will also request a $1.2 to $1.4 billion general obligation bond to revitalize blighted state buildings that can be saved and build new, workable and efficient facilities for the National Guard, community colleges and other agencies that will help create economic development opportunities for their communities.

Help and Protect Those in Need

To support the well-being of our most vulnerable citizens, Governor McCrory’s budget commits more than $10.8 billion to the Department of Health and Human Services over the biennium, or more than 24 percent of the General Fund annually.

Included in this allocation is an estimated need for $287 million in additional Medicaid funding in the first year of the biennium and $460.6 million in year two, taking into consideration forecasted changes in enrollment, anticipated costs per recipient, and utilization of services, as well as federal matching funds. Additionally, it supports the Healthy NC reform plan which puts patients first and controls costs for the taxpayers, while incentivizing health care providers to coordinate care.

This budget also prudently allocates $175 million over the biennium to the Medicaid Risk Reserve to provide a buffer against financial uncertainty in one of our biggest cost drivers.

The budget provides nearly $82 million over the biennium in new funding for mental health and substance abuse services and increases funding for foster care, adoption support and the collection of child support payments.

The budget also provides funds to modernize and replace equipment for the Office of the Chief Medical Examiner.

It also continues the state’s substantial commitment to the North Carolina Families Accessing Services through Technology (NC FAST) and NCTracks information technology platforms, which are replacing legacy information technology systems to efficiently serve our citizens and pay health care providers.

This budget fully funds the HOME match program with more than $1.5 million in each fiscal year. These dollars leverage federal matching funds of $20 million and enable the state to collaborate with local governments and nonprofits to serve 340 additional households, create over 400 jobs and generate an additional $1.7 million in state and local revenue.  Additionally, $1 million each year is committed to the Housing Trust Fund to help alleviate the shortage of safe, affordable housing for low- and moderate-income citizens.

The governor’s budget also recognizes the dedication of law enforcement officers who protect us daily and corrections officers who confront the most violent people in our state every day.

Governor McCrory’s budget includes $21 million in funding to help compensate and retain our corrections officers and their supervisors and funds the full five percent step increase for eligible State Troopers in each year of the biennium.

There is additional funding to improve crime lab operations and reduce criminal case backlogs as well as funding for the Highway Patrol, State Bureau of Investigation, and Alcohol Law Enforcement to replace aging law enforcement vehicles to improve safety and reduce maintenance costs.

Find Efficiencies and Streamline Operations 

The North Carolina Government Efficiency and Reform (NCGEAR) initiative will save more than $14 million in year one and more than $57 million in year two of the biennium. NCGEAR savings over 10 years are conservatively estimated at more than $615 million in today’s dollars.

To continue customer service improvements at the Division of Motor Vehicles, $30 million is budgeted for technology and equipment modernization.

The budget carries out government operations efficiencies called for by the Governor in his State of the State address. Future workers’ compensation costs will be reduced through consolidated reporting and an overall improvement in case management to protect against fraud and abuse.

Attractions such as the North Carolina Zoo, state aquariums, museums and state parks will be transferred from the Department of Environment and Natural Resources to the Department of Cultural Resources, which manages attractions as part of its mission. Advocacy groups will be moved from the Department of Administration to the Governor’s Office.

To strengthen the Veteran Affairs and the Office of the Military Advisor, the budget proposes the creation of the Department of Military and Veterans Affairs.

This budget streamlines state information technology operations, making them more accountable and coordinated by creating a Department of Information Technology.

“The members of my administration and I are honored to submit this budget to the General Assembly on behalf of the people of this great state,”Governor McCrory said.

Highlights of Governor McCrory’s Proposed Budget

  • Prudent fiscal management is our first responsibility as stewards of taxpayer dollars.
  • No tax increases are proposed in this budget.
  • Proposed budget grows more slowly than inflation and population remaining well below the statutory cap.
  • Strengthening and enhancing reserves in excess of $650 million will support our position as one of only ten states with a Triple A bond rating from all three major rating agencies:
  • Allocates an additional $47 million to the Savings Reserve Account, bringing the total balance to $698 million.
  • Provides $47 million for the Repairs and Renovations Account to maintain state infrastructure.
  • Establishes a new Medicaid Risk Reserve fund at $175 million over the biennium to provide a buffer against inevitable uncertainty in one of our biggest cost drivers.
  • This budget assumes enactment of a cut in the gasoline tax from 37.5 to 35 cents per gallon.
  • This budget is balanced, consistent with our state constitution and responsible governance.

Statement from N.C. Justice Center’s Alexandra Forter Sirota on the Governor’s Budget

“‘Tough choices’ made by McCrory were a result of harmful tax cuts.

The ‘tough choices’ Governor McCrory says he made were self-inflicted. They come from tax cuts that primarily benefit the wealthy and profitable corporations, meaning there is too little left to invest in education and other building blocks of a strong economy.

Also troubling is the Governor’s use of changes to the budgeting process to mask the state’s inability to keep up with growing needs. It’s wrong to abandon longstanding practices that have served North Carolina well just to avoid debate over failed tax policies. Budget tricks won’t hide the fact that this will make it even harder in the future to promote broad prosperity.”

Today NCDP Chair Patsy Keever responds to Governor McCrory’s Budget Proposal Press Conference

“Budgets reflect priorities. Over the last two years, Governor McCrory chose to offer massive tax giveaways to millionaires and giant corporations in places like Texas and China – and forced middle class families in North Carolina to pay for it. It’s time that we build an economy that works for everyone – that means creating good new jobs, putting more money in the pockets of the middle class, and providing our kids with a quality education. Unfortunately, Governor McCrory’s press conference today just offered more empty rhetoric instead of a meaningful plan to change the priorities in Raleigh and put the middle class first.” says Chair Keever

NCGOP Chairman Responds to Associated Press’ Smear Campaign on Governor Pat McCrory

Last night, the Associated Press posted a factually incorrect and misleading news story online about Governor McCrory in an attempt to smear the governor over personal business dealings.

In response to the story, North Carolina Republican Party Chairman Claude E. Pope, Jr. issued the following statement:

“The Associated Press took no time after Governor McCrory’s re-election kick-off to begin releasing misleading news stories that have no factual evidence to back up their claims against the governor. The Governor’s office quickly released rebuttals to the false claims made by the AP. As we enter into this next election cycle, it is disappointing that the AP would launch a smear campaign and play partisan politics instead of reporting real facts to the people of North Carolina. I hope that moving forward we can expect honest news reporting from the AP instead of acting like a Democrat Party press shop.”