— Gov. Pat McCrory told the State Board of Education Wednesday that he has found enough money in the budget to continue the state's practice of providing salary supplements to teachers with advanced degrees.

Teachers who have earned master's or doctoral degrees have traditionally been given a salary bump to recognize their extra training, but lawmakers deleted that provision in the state budget this year – one of several policy changes that have irritated teachers statewide – for anyone who doesn't have their degree in hand by the end of the 2013-14 school year.

McCrory said his budget office "found" about $10 million in the budget to provide more than 3,000 teachers already working on a master's degree bonuses once they graduate.

The governor left the meeting without taking questions from reporters. Kim Genardo, a spokeswoman for the governor, and Eric Guckian, a senior education adviser, met reporters afterward but could not identify the source of the money for the pay raises. They also could not say specifically how the governor or other executive branch officials could ignore a budget law that cuts off the salary bumps.

"The state board is authorized to make this change," Guckian said.

The State Board of Education is expected to continue its meeting Thursday and will have the extension of the master's degree supplement on its agenda.

Genardo later clarified that lawmakers had included the money the governor would need for the coming year in the current budget. The state board action, she said, would merely move back the deadline for those working on their master's degrees from April 1 to May 1.

As for the $10 million, that's money that McCrory will request from the legislature in the 2014-15 budget.

"We've gotten feedback from our teachers, and from our community, that they're feeling insulted by this master's pay issue," Guckian said. "We honor and respect our teachers."

Rep. Mike Hager, R-Rutherford, said he doesn't think McCrory is thumbing his nose at lawmakers.

"I think there's a lot of the legislature, especially in the House, that agrees with him," Hager said. "I think it's a lack of interpretation. They interpret it one way versus the way the legislature interprets it, and I think that's an easy fix."

Sen. Tom Apodaca, R-Henderson, said the master's pay issue was one of the "most debated" items of the education budget, adding that lawmakers looked for a way to continue it indefinitely.

"We wanted to, desperately wanted to," Apodaca said. "We didn't hear any suggestions (from the governor) at that time."

The governor also vowed to push for raises for all teachers in next year's budget, again blaming cost overruns in the Medicaid program for not being able to secure the 1 percent raise he sought for all state workers in this year's budget.

"We are catching some deserved heat on this," McCrory said at the Cary Chamber of Commerce's annual meeting Wednesday night. "I've got to find a revenue source to reward our teachers and give them hope for a career as teachers."

The governor pegged the cost overruns in the Medicaid program at roughly $500 million and said he has to bring up "some fairly controversial proposals to change Medicaid."

"If we had not had that budget cost overrun, every teacher would have had a substantial increase in North Carolina. In fact, every state employee would have had a substantial increase in North Carolina," McCrory said.

Democrats immediately took to social media to point out changes to the tax system backed by McCrory cost the state money as well. However, the bulk of those changes don't kick in until the 2014-15 fiscal year.

McCrory also noted that he has signed an executive order creating the Governor’s Teacher Advisory Council, which "will give a voice to a diverse group of teachers from across the state." And he criticized lawmakers for including changes to education policy in the state budget.