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Governor McCrory Proposes a Responsible, Balanced Budget to Strengthen North Carolina's Foundation

Press Release

Location: Raleigh, NC

"None of this can be about politics, power, legacy, turf, or who gets the credit. Who cares? This is about the people of North Carolina... It's about solving problems and developing long-term solutions."

- Governor Pat McCrory, State of the State Address, 2/18/2013

Raleigh, N.C. -- Today, Governor McCrory proposed a balanced budget for fiscal years 2013-2015, continuing his administration's focus on finding long-term solutions to fix North Carolina's economy, transform education and make government more efficient.

The governor's $20.6 billion spending plan continues to implement his vision of a government that focuses on delivering the best possible results, customer service and quality of life for the people of North Carolina. By turning the page on the kind of short-term budget gimmicks, debt and irresponsible taxes that hurt economic growth and prosperity in the past, Governor McCrory's fiscally responsible budget strengthens North Carolina's foundation for future generations and moves the state closer to fulfilling and even exceeding its potential.

Transforming Education:

Governor McCrory is following through on his commitment to transform education by empowering North Carolina's hardworking teachers and expanding opportunities for students to get the necessary skills and knowledge for success. His recommended budget:

Increases investment in early childhood education. The governor's budget allocates an additional $52.4 million over two years to fund services for an additional 5,000 at-risk four year olds, to serve a total of 30,000 four year olds per year through NC Pre-K.

Hires 1,800 more full-time teachers. The McCrory administration prioritizes resources on hiring more full-time certified teachers throughout North Carolina over the next two years rather than classroom assistants to help our students succeed in the classroom.

Dedicates more resources for digital learning. Governor McCrory's budget follows through on his commitment to expand digital learning initiatives and promote technology in the classroom with $43 million in additional funding over two years. Lottery funds are directed to support the purchase of reading tablets and technology to help address 3rd grade reading achievement and other high priorities.

Establishes the Center for Safer Schools. Following through on his commitment to protect North Carolina's children, the governor's budget provides $625,000 over two years for the Center for Safer Schools to provide training and technical support to educators, law enforcement agencies, and parents.

Continues the implementation of the Excellent Public Schools Act. Governor McCrory's budget provides $28 million in additional funding to help improve third grade reading proficiency. Funds will be used for summer reading camps and reading plans for parents.

Makes investments to ensure high school graduates are college and career ready. The governor's budget delivers on his vision of strengthening K-12 education and decreasing the need for remedial courses in higher education. $7.5 million is provided for diagnostics in grades 8-12 to identify students in need of assistance and provide individualized student instructional strategies to help ensure students graduate career and college ready.

Increases funding for high-demand courses in Community Colleges. The governor's budget provides $32 million in additional funds over two years for resource-intensive community college programs in high demand by employers such as engineering, vocational and technology training.

Increases funding for technical education in Community Colleges. The governor's budget increases funding by $28 million over two years for technical education equipment and infrastructure in North Carolina's Community College system.

Supports university system's effort to align higher education with changing market needs and current economic conditions. The governor's budget follows through on his commitment to promote enrollment in high-demand fields and align educational needs with the marketplace. It provides $63 million over two years to help fund the University of North Carolina's Strategic Directions Plan, which will prepare students for workforce demands in various high-growth sectors.

Fixing North Carolina's Economy:

Governor McCrory continues to deliver on his promise to develop a long-term economic development strategy to attract, retain and grow North Carolina jobs. The governor's recommended budget:

Develops and implements new economic development and branding strategy. Governor McCrory's budget provides $2.7 million for the Department of Commerce to both develop and implement a new economic development and branding strategy. In an increasingly competitive environment for jobs, tourism and investment, this initiative will help position North Carolina to compete through recruitment, media and marketing efforts.

Recapitalizes the Main Street Solutions Fund. To strengthen the core of small towns and communities throughout North Carolina, the governor's budget provides $1.8 million over 2 years for the Main Street Solutions program focused on downtown economic development to support small businesses and job creation.

Resumes funds for the One North Carolina Small Business Program. The governor's budget provides funds to assist small businesses obtain and leverage competitive federal funding through matching funds to promote innovation, research and development.

Maintains a strong commitment to agriculture. The governor's recommended budget restores $1 million in funding for the Agriculture Water Resources Assistance Program over two years, enabling the program to continue assisting farmers and landowners identify opportunities to increase water efficiency.

Fulfills our state's economic development obligations. This budget sets aside $76.2 million over two years in the Job Development Investment Grant (JDIG) to fulfill past obligations made to companies who qualify for performance-based economic incentive grants by growing jobs and investing capital in North Carolina.

Includes over $14 million in funds for the Job Maintenance and Capital Development (JMAC) program, which is designed to encourage businesses to retain high paying quality jobs and large-scale capital investments in the state.

Building a More Efficient and Effective State Government:

Governor McCrory's budget delivers on the promise of building a more efficient state government with a culture of customer service to effectively meet the needs of our citizens. The Governor's recommended budget:

Makes investments to fix and modernize state government services. After more than a decade of neglect, Governor McCrory's budget provides $77 million over two years to the Information Technology Reserve to fix our systems and increase customer service. The budget also continues the development of the Tax Information Management System and the state's core Banking System.

Re-establishes Drug Treatment Courts. The Governor's recommended budget follows through on his commitment to help individuals battle addiction by re-establishing Drug Treatment Courts. This budget provides $7.2 million for Drug Treatment Courts to break the cycle of addiction that gives rise to violence in our communities and help individuals reclaim their lives.

Invests in North Carolina's talented state employees. Governor McCrory's budget provides a salary increase of 1% to teachers and state employees as well as a 1% cost of living adjustment for retirees. The budget also provides funds for a salary adjustment reserve to provide for competitive pay increases and retention bonuses for key employees who are not receiving market wages.

Saves taxpayer money by finding efficiencies and breaking down silos. The Governor's recommended budget continues to break down silos and find efficiencies in state government by requiring departments and agencies to deliver cost savings of 2% to 3% to taxpayers.

Creates the NC Government Efficiency and Reform initiative (NC GEAR) to transform state government. To increase efficiency and improve customer service in state government, Governor McCrory's budget provides funds to establish NC GEAR, an initiative to develop a strategic transformation plan for state government.

Fully funds the state's Medicaid program. Governor McCrory's budget reaffirms his administration's commitment to reforming and strengthening the state's Medicaid program. The budget adds an additional $575M over two years to Medicaid to provide critical services to our state's most vulnerable citizens.

Makes key investments in mental health. Governor McCrory's budget provides an additional $13 million over two years to deliver needed services to individuals with mental illness. This budget also invests nearly $30 million over two years to help open the new Broughton Psychiatric Hospital.

Compensates eugenics victims. Governor McCrory's budget provides $10 million to compensate victims of the state's former Eugenics Board program, which involuntarily sterilized North Carolinians during the 20th century. The budget also continues operations of the Office of Justice for Sterilization Victims to provide ongoing help and counseling to victims.

Delivers savings through correctional facility realignment and consolidation. Governor McCrory's budget saves taxpayers more than $54 million over two years by realigning outdated and inefficient correctional facilities. $20 million in savings is reinvested in community corrections to fund additional probation/parole officers and reduce the long-term need for prison beds.

Meets pension and health benefits obligations. Governor McCrory's budget responsibly provides for a payment of $72 million to the state pension system over two years, fulfilling the state's pension obligations. Additionally, Governor McCrory's budget pays $181 million into the state health plan over two years.

A Responsible, Balanced Budget:

Governor McCrory's budget is balanced and spends responsibly, consistent with revenue projections, inflation expectations of 1.5% and below the overall economic growth anticipated in fiscal year 2013-14. His recommended budget also:

Authorizes no new debt.

Proposes no state tax increases.

Stops the use of "one-shot" money and budget gimmicks to fund recurring state programs.

Provides for a responsible $139 million budget surplus at the end of fiscal year 2013-14.

Maintains and enhances budget reserves. Governor McCrory's budget sets aside reserves of more than $600 million, responsibly saving for the future and aggressively protecting North Carolina's Triple-A bond rating.

◦ Allocates $400 million over two years for the Savings Reserve Account, bringing the total balance to an all-time high of $813 million.

◦ Provides $300 million over two years for the Repairs and Renovations Account, which will allow us to fix and enhance the state's buildings and broken infrastructure. An estimated 5,000 jobs will be created for small to mid-size contractors.

◦ Establishes a Medicaid Risk Reserve in the amount of $180 million over two years to assist with overall Medicaid reform, and to address any potential mid-year shortfalls in funding.

◦ Adds $20 million to rebuild the Disaster Relief Reserve to provide resources and matching funds to help people recover from small to medium size natural disasters.

Preserves the integrity of the Highway Trust Fund. Consistent with the governor's priority of building a long-term, strategic plan for transportation infrastructure, Governor McCrory's budget does not transfer money from the Highway Trust Fund to the general fund.

To view and download the entire budget, please visit

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