May 3, 2016 Legislative Update

In This Issue…

  1. General Assembly Returns to Raleigh
  2. Governor’s Education Budget Recommendations
  3. Concerns Voiced From Legislators
  4. Internal Revenue Code Update
  5. Education Bills Introduced in the House and Senate

General Assembly Returns to Raleigh

The NC General Assembly gaveled in the 2016 short session last Monday evening. Members, staff, and lobbyists would hardly consider the past seven months as “time-off”; the interim was filled with study committee meetings, primary elections, and two special sessions. Governor McCrory released his suggested adjustments to the State’s FY17 budget last week and State Budget Director Andrew Heath gave a presentation on the suggested budget changes at a joint meeting of the House and Senate Appropriations Committees on Wednesday. Much of the discussion during the meeting centered around teacher and state employee pay raises and the Governor’s requests regarding Health and Human Services spending. A total of 146 bills were filed last week and votes have already been taken on both floors.

Governor’s Education Budget Recommendations

Teacher Pay

Governor McCrory’s recommended budget includes an average five percent pay increase for FY17. This increase would bring the teacher pay average in North Carolina to $50,000. The five percent increase would be state funded recurring dollars. Principals and other school employees would receive a three percent increase.

Click Here to See Chart


The recommendations also include a three and a half percent one-time bonus for FY17. This bonus would come from state funded nonrecurring dollars. Principals and teaching assistance would also receive a three and a half percent bonus, while other school employees would receive a bonus of three percent.


$2 million would be allotted to establish a scholarship fund to attract 300 new teachers. The scholarships would go to students seeking degrees in math or science education.

Modernizing Classrooms

$29 million in lottery funds would be appropriated to the State Board of Education to implement a statewide digital learning plan. Of that $29 million, $26.4 million would be used for school acquisition of digital content and instructional resources, $1.5 million would be allocated for professional development for all teachers and administrators on digital learning standards, and $1.1 million would be provided to the Friday Institute and NC State University for management of the NC Digital Learning Plan.

$100,000 in nonrecurring funds would fund the final installations of panic alarms for schools that will connect them with the nearest law enforcement agency.

Additional Funding

  • $10 million from lottery receipts would be used for classroom supplies and equipment in public schools.
  • $6 million towards serving an additional 300 special needs students across the state.
  • $4 million will go towards expanding Pre-K to serve an additional 800 at-risk 4 year olds.

It is important to note that these are only recommendations from the Governor’s administration and it is likely that the final budget revisions that come from the House and Senate will look very different.

Concerns Voiced From Legislators

On Wednesday legislators had an opportunity to ask State Budget Director, Andrew Heath, questions about the Governor’s recommendations in a joint meeting of House and Senate Appropriations Committees. Thursday the House Appropriations Committee on Education met to dive deeper into the education portion of the Governor’s proposed budget.

Expressed Concerns

  • State employee pay raises should be equal across the board; how can the state justify giving a higher increase to teachers over all other state employees?
  • Lack of adjustments to the cost of living for retired teachers.
  • No additional teaching assistant positions.
  • Projected, not guaranteed, lottery dollars being used as the funding source for some of the budget adjustments.

Internal Revenue Code Update

On Thursday the Senate approved the annual IRC update bill, Senate Bill 726. The bill conforms or “couples” our state personal income tax code to the federal code with respect to the teachers’ classroom expense deduction. This deduction allows primary and secondary education professionals to take an above the line deduction for qualified expenses up to $250 paid out of pocket during the year. Teachers in NC have enjoyed this deduction for years and this legislation merely continues that.

Click Here to Read Senate Bill 726

Education Bills Introduced in the House and Senate


  • HB 955, an act to appropriate funds to the special education scholarship grant program for children with disabilities and to make changes to that program and to make changes to the opportunity scholarship grant program. Changes include adding children whose parent or legal guardian is on full-time duty status in the active uniformed service of the United States, including members of the National Guard and Reserve on active duty orders. See the full bill here.
  • HB 960, an act to modify the ability of a member of the teacher’s and state employee’s retirement system to purchase credit for employment in a charter school operated by a private nonprofit corporation. The bill would allow an employee who was employed at a charter school, who then moved to a state employee position; the opportunity to receive credit for the time served at charter school through the teacher’s and state employee’s retirement system. See the full bill here.
  • HB 969, an act to add children of military families as an eligibility category for the opportunity scholarship grant program, as recommended by the Joint Legislative  Oversight Committee on General Government. Children of active duty military families would be eligible to receive an opportunity scholarship grant. See the full bill here.
  • HB 1014, an act to make conforming changes by removing obsolete references to the More at Four program in the General Statutes, as recommended by the Joint Legislative Oversight Committee on Health and Human Services. This bill strictly makes technical and clarifying changes. See the full bill here.


  • SB 753, an act to reenact the sales and use tax holiday for school supplies. Would reinstate the tax free weekend in North Carolina. This weekend was typically used as an opportunity for parents and guardians to save money on school related items while getting their children ready for the coming school year. See the full bill here.
  • SB 742, an act to add children of military families as an eligibility category for the opportunity scholarship grant program, as recommended by the Joint Legislative  Oversight Committee on General Government. This is a companion bill to House Bill 969 which is discussed above. See the full bill here.

What do you think?

If you have questions or concerns, please share your thoughts and ideas with us.
Contact us at

Submitted by Rick Zechini

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 Rick Zechini at