Mar 20, 2013

Governor McCrory Releases His 2013-2015 Budget Recommendations

This morning Governor McCrory released his 2013-2015 budget recommendations for the state of North Carolina:

 3 Main budget focus areas: Economy, Education, Government Efficiency

-          Most state agencies see an average of a 1-3% budget reduction
-          Total state budget including federal dollars: $49.6B
-          For 2013-14, 55.6% of GF goes to Education; in 2014-15, 54.9% to Education
-          Anticipated $139M surplus at the end of the year
-          Governor will study efficiencies in state government, “may see more changes than normal in a short session in 2014”
-          Governor supports revenue neutral personal and corporate income tax reform
-          Budget anticipates revenue-neutral tax reform
-          Tax reform will be submitted by separate legislation
-          Adds $400M to the Rainy Day Fund (puts fund to $813M total)
-          Repeals the Estate Tax
-          $10M for Eugenics Compensation
-          1% pay raise for State Employees and Teachers
-          1% cost of living increase for retirees
-          $77M to fix and upgrade the state’s IT system
-          $150M into Repairs and Renovations of government facilities, $50M earmarked for UNC system
-          $20M to rebuild Disaster Relief Reserve
-          Repeal of the NC Public Campaign Fund
-          Repeal of the NC Political Parties Financing Fund
-          $14M for JMAC fund.
-          $76.2M over 2 years for JDIG.
-          $5.8 for Dept. of Commerce to develop an economic development branding strategy.
-          $2.9M each year for a new strategy for economic development in the state, including for marketing.
-          $1.8M for Main Street Solutions fund- support small businesses and job creation.
-          Hires 1,800 additional teachers over 2 years.
-          $28M in 2014-15 to implement the Excellent Public Schools Act.
-          Out-of-State tuition increases for UNC-CH, NCSU, UNC-W, NC A&T, UNC-C, UNCSA of 12.3%.
o   Tuition freeze for in-state students.
-          $28M to improve third-grade reading scores.
-          $43M over 2 years for digital learning.
-          $625,000 over 2 years for establishment of the Center for Safer Schools.
-          $42M over 2 years to develop high-cost college programs for in-demand jobs like electronics and mechanics.
-          $63M over 2 years for the UNC system’s state strategic plan.
-          $52.4M additional dollars over 2 years for Pre-K; adds 5,000 additional 4-year-olds.
-          $34M over 2 years to expand technology in schools.
-          $28M over 2 years for technical equipment in community colleges.
-          $13M in additional dollars to mental health.
-          $30M to help open new Broughton Psychiatric Hospital.
-          $575M in additional money over 2 years for Medicaid- commitment to reforming and strengthening.
-          $180M to establish Medicaid Risk Reserve.
-          Closes 5 prisons: Wayne, Duplin, Bladen, Robeson, Western (saves $54M over 2 years).
-          $7.2M to reinstate the Drug Treatment Courts.
-          $500,000 for more equipment and $3.1M to enhance DNA analysis in the State Crime Lab.
-          $7.5 million for a new Economic Development fund to be used for highway improvements that promote safety and mobility initiatives.
-          DMV reform: adding an Saturday service for 20 locations in 2013-14, expanding to a total of 30 locations in 2014-15.
o   Adding self-service kiosks.
o   Eliminating unnecessary exams.

Please contact the Raleigh McGuireWoods Consulting team if you have any questions or comments:

Harry Kaplan, Senior Vice-President
Jeff Barnhart, Senior Vice-President
Franklin Freeman, Senior Vice-President
John Merritt, Senior Vice-President
Johnny Tillett, Senior Vice-President
Rita Harris, Vice-President
Bo Heath, Vice-President
Kerri Burke, Assistant Vice-President
Sarah Wolfe, Research Assistant
Katy Feinberg, Strategic Communications