Nearly a month into the 2013-14 fiscal year, Gov. Pat McCrory is set to sign the state budget into law today. The budget spends a total of $20.6 billion, up about 2.5 percent from last year’s $20.18 billion budget, and would mark a 39 percent increase in the state budget over ten years.

Significant policy changes are included in the budget as well. Such policies include: a major school choice initiative, ending the current K-12 teacher tenure system in favor of short-term work contracts and merit pay, Medicaid reform, expansion of the state’s Pre-K program, ending the taxpayer funds for judicial campaigns, capping the state gas tax and a change in how nearly $1 billion of road and highway construction funds are allocated.

Education

K-12

Total state spending comes to $7.9 billion – up roughly $400 million over last year’s appropriation

Implements opportunity scholarships in the second year of the biennium, providing vouchers of up to $4,200 for low-income families to use toward private school tuition. Projects an $11.8 million savings in the first year of implementation

Eliminates the Local Education Agency (LEA) adjustments that had been in place for the last several years. This “adjustment” was a reduction to LEA funding in which the local agencies had discretion over how to absorb the reductions. Instead, the budget reduces specific allotments to school districts, by reducing the number of teachers via increased class sizes and the elimination of teacher assistant positions and some instructional support personnel

Shifts from the traditional system of teacher tenure to one based upon short-term contracts, with incentives for bonuses to be paid for more effective teachers

Allocates an additional $10.6 million to accommodate projected enrollment increases

Community Colleges

Increases tuition by $2.50 per credit hour for both resident and non-resident students

Provides an additional $10 million for instructional equipment technology, bringing total allotment for this year to $59 million for this purpose

UNC System

Includes a $25.8 million reduction due to anticipated savings from administrative, instructional and operational efficiencies

Increases tuition for nonresident undergraduate students effective FY 2014-15. Rates will rise by 12.3% for UNC-SA, NC A&T, UNC-CH, and UNC-W and 6% for all others

Also includes a $65.8 million “management flexibility reduction”

Allocates $10 million for “opportunity scholarships” in FY 2014-15 for students to attend nonpublic colleges. Grants of up to $4,200 will be awarded to eligible students

Health and Human Services

Includes a provision allowing for the state’s executive branch to develop a reform plan for the state’s Medicaid program

Uses $12.4 million in lottery money to fund an additional 2,500 slots in the NC Pre-K (formerly More at Four) program

Provides an additional $434 million to pay for increasing Medicaid costs. This is in addition to the $308 million already set aside in the current budget year to cover Medicaid cost overruns

$50 million is appropriated to accommodate new Medicaid enrollees as a result of Obamacare. While North Carolina rejected the Medicaid expansion under Obamacare, the state still anticipates about 70,000 new enrollees as a result of various provisions in Obamacare related to penalties for non-coverage and outreach efforts

Natural and Economic Resources

Allocates $600,000 to support the Energy and Mining Commission, tasked with overseeing shale gas exploration; part of the funding will also support data collection and analysis of geological samples in the state’s shale gas basins

Increases by $800,000 funding to the state Commerce Department to “develop a comprehensive branding strategy to promote North Carolina”

Allocates $11.3 million to create a new Rural Economic Development Division

Eliminates state funding of operational expenditures for nonprofit groups the Biofuels Center, Community Development Initiative, Council of Governments, Institute for Minority Economic Development, Land Loss Prevention Project, NC Association of Community Development Corporations, NC Indian Economic Development Initiative, and Partnership for the Sounds

Eliminates funding for the troubled Rural Economic Development Center, scheduled to be nearly $17 million this year

Reduces funding to the NC Biotechnology Center by 50 percent ($8.6 million)

Justice & Public Safety

Appropriates $2.5 million to hire additional State Highway Patrol officers

Closes four jails and one youth custody facility for total savings of roughly $23 million

Allocates $5.7 million in FY 2013-14 and $12 million to hire 175 additional probation officers

Closes 3 youth detention centers for an estimate savings of roughly $4.8 million

General Government

Closes out the NC Public Campaign Finance fund by transferring the remaining $3.5 million to general availability

Provides a one-time increase of $1.8 million in funding for the North Carolina Symphony and The Bridge Down East, a youth facility on Harkers Island

Transportation

Caps the state gas tax at 37.5 cents per gallon, estimated to save motorists $2.4 million this year

Shifts $931 million in road and highway construction dollars from the current funding programs to the newly created “Strategic Prioritization Program” established to more efficiently allocate monies to projects based more closely on actual needs

State Employees and Other Funds