August 2, 2014 Legislative Update

In This Issue…

  1. Budget Bill Approved by Senate & House – Gov. McCrory Says He’ll Sign It
  2. Salary & Compensation Issues
  3. PENC’s Perspective

Budget Bill Approved by Senate & House – Gov. McCrory Says He’ll Sign It

Gridlock in Raleigh broke early in the week of July 27, resulting in passage of S744 in separate votes by the Senate on July 30 and 31 and by the House on Aug. 1 and 2. At a press conference Aug. 1 that followed the initial House vote, Gov. Pat McCrory said he would sign the bill. The documents that comprise the budget as enacted by the General Assembly are as follows:

  1. Appropriations Act of 2014
  2. Joint Conference Committee Report

The more than $21 billion budget provides educators with an average 5.5 percent salary increase when calculated without longevity. With longevity funds for the 2014-2015 school year added in, the average is about 7.2 percent. Gov. McCrory said earlier in the session that he would veto a budget that included a raise exceeding 6 percent because he didn’t believe that rate would be sustainable. The scenario presented in the budget met Gov. McCrory’s criteria, and he said that he would sign the bill.

The budget includes a new, compressed 6 band salary schedule pushed by the Senate and agreed to by the House. This chart, which appeared on PENC’s Facebook page and Twitter feed, explains the new pay plan, including longevity payment funds in the calculation.

Longevity payments due to educators on their anniversary date for the remainder of this school year are to be paid on a pro-rata basis with June 30, 2014 as the last date of the calculation.

The budget includes many compensation related provisions listed below. A more thorough discussion of the budget and of other legislation enacted during the short session will be published in the coming weeks following the upcoming legislative recess Aug. 14.

Salary & Compensation Issues

  • Educator compensationaverage 5.5 percent raise plus inclusion of longevity in calculation to equal an average 7.2 percent raise total. For those in Steps 0-30, the salary increase ranges from 0.29% to 18.51%, with the greatest increases seen in Steps 5-11. Salary increases for Educators who have worked 30 years and beyond get what they would have received under the old pay plan, plus longevity, plus a $1000 bonus to be paid incrementally throughout the year. Please refer to the salary chart for specific details.
  • Masters’ supplements will be honored for anyone who was completed at least one course prior to Aug. 1, 2013.
  • National Board supplements will remain in place.
  • Masters’ supplement calculation and NBCT supplement calculation will be based off the “A” schedule, which can be found in this salary chart. Teachers eligible for Masters’ supplements will earn an additional 10% of their salary and NBCT Teachers will receive an additional 12% of their salary.
  • Instructional Coaches who work in Title I schools with NBCT certification will be eligible to receive the supplement.
  • Teachers who earned longevity during the 2013-2014 fiscal year will be paid prorated longevity for annual longevity earned prior to July 1, 2014.
  • No longevity will be provided after the 2014-2015 school year, unless the General Assembly acts to change that.
  • Differentiated pay for highly effective teachers – a pot of $10 million is set aside to fund proposals by school districts to provide compensation for highly effective teachers.
  • Principals and Assistant Principals will receive a salary increase between 1.8-2%. For those at the top of the schedule who do not receive a salary increase on the new schedule, they will receive a nonrecurring bonus of $809 (See Pages 51-54 of the budget document for specific details).
  • Non-certified personnel who are not on a pay schedule will receive a $500 raise. They will continue to receive longevity payments, if they’ve worked 10 years or longer.
  • Central Office Employees will receive salary increases according to the provisions on Page 54 of the budget document.
  • Other state employees, including DPI employees, will receive a $1000 increase.
  • Other state employees keep longevity.
  • Retirees will receive 1 percent COLA.
  • Other state employees will also receive 5 bonus annual leave days.
  • No employee-paid premium increases for the State Health Plan.

PENC’s Perspective

While PENC has very serious concerns about the budget, we are pleased that educators will finally receive a salary increase. PENC acknowledges the efforts of legislators to address the important issue of compensation, and we are thankful to lawmakers for hearing us, especially to Rep. Bryan Holloway (R-Stokes) who advocated PENC’s approach.

PENC would have preferred the House’s proposal for a more modest increase – that preserved longevity – and that included discourse involving educators to modernize the salary schedule, rather than adopting the Senate’s proposal – which had NO public discussion or educator input. PENC is concerned that any raise this year might not be sustainable in the future. An increase that makes teachers’ salaries more competitive regionally and nationally will do no good if funding is not provided for raises next year and in future years. And, while teachers suffered many years without meaningful salary increases, at least senior teachers who were in the classroom 10 years or longer received longevity. That won’t happen in the future.

PENC is grateful that lawmakers honored the commitment to provide Masters’ supplements to educators enrolled in programs prior to the elimination last year; however, we are disappointed that the supplement has been eliminated moving forward. PENC will continue to raise that issue and press for reinstatement, at the very least for subject-specific degrees, during the upcoming legislative long session.

PENC is also concerned about the funding for teacher assistants. While the state provided sufficient funding for current teachers assistants, part of the funding is with non-recurring money, which could mean layoffs next year.  And, PENC is troubled at the other costs – including Medicaid cuts – that pay for the increases.

Several policy items were omitted from the final budget, including fixes to Read to Achieve and School Grades. Those items are important issues that matter to families and to businesses that are looking at how well North Carolina schools are doing. PENC believes that School Grades must accurately reflect all of the factors that affect schools, their teachers and the communities they serve.

Finally, PENC notes with interest that four House Republican lawmakers voted against the budget, including two of the four chairs of the powerful Finance Committee: Representatives Julia Howard (R-Davie) and Mitchell Setzer (R-Catwaba). When asked for the reason behind her “no” vote, Rep. Howard reportedly stated that she did not believe that the spending reflected in S744 was sustainable next year, given the changes to North Carolina’s tax structure that come online in 2015. That is an ominous statement.

Thank you to PENC members for your ongoing support and for everything you do for North Carolina’s children.

P.S. – Acrimony and disagreements are typical during policy and political debate. But, that which occurred during the 2014 Session of the North Carolina General Assembly is truly noteworthy, especially when one considers that the leaders of both chambers of the legislative branch and the executive branch are of the same party. Highlighting this inability to agree is the fact that we cannot tell you at this time when the General Assembly will adjourn its activity. As of this writing, there are three bills under consideration that address adjournment. A condition of passage of a bill is that both chambers must agree upon them in exactly the same form. None of the resolutions meet that criteria so far.

The North Carolina Senate and House will return; we just don’t know when they will leave.

What do you think?
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Submitted by Evelyn Hawthorne

 For more information about the North Carolina General Assembly, click here.
To identify and contact your legislators, click here.
For information about specific issues, please contact PENC government relations consultant Evelyn Hawthorne at