N.C. Senate budget temporarily funds child care

N.C. Senate budget temporarily funds child care

By Grace Vitaglione

The North Carolina Senate released a budget proposal June 19 for the coming fiscal year that would put funding toward child care needs and maintain last year’s budget’s 3 percent raise for state employees. 

The $31.4 billion dollar proposal comes after the House released their own budget plan Monday. The Senate bill contains about $300 million less in new net general fund spending than the House’s, and $500 million less total.

Leaders of the two chambers are at a standoff, with Senate leader Phil Berger (R-Eden) and House Speaker Tim Moore (R-Kings Mountain) each saying they don’t expect to hear the other’s budget bills.

Berger reiterated that the two chambers need to agree on a number to spend before discussing where the money will go. 

“Right now, we’re half a billion dollars apart on that question,” he said.

Delaying the hard decisions

Each legislative biennium, the General Assembly approves a two-year state spending plan that purportedly doesn’t need updating. But usually, lawmakers return to Raleigh in the second year of the biennium for the “short” legislative work session to make budget adjustments. 

Last year’s spending plan, however, allocated funds through June 30, 2025, so the two chambers don’t necessarily need to reach agreement. 

The Senate budget adjustment would extend a total of $136.5 million for child care providers through the fiscal year that begins July 1 — about $1.5 million more than the House budget.

The Senate’s plan has a similar child care funding split as the House — $111 million in state dollars that came from federal pandemic relief money that the state lawmakers had placed into a reserve fund. The plan also uses almost $25.5 million in federal dollars from the Child Care and Development Fund block grant that otherwise would have gone to other priorities, but will be put toward child care. 

If signed into law, this budget could prevent a funding shortfall that’s expected to take effect in July when COVID-era money from the federal American Rescue Plan Act that directly supported better salaries and rates for child care centers runs out.

Advocates have pushed for about $180 million to meet the needs of child care agencies through the entirety of the upcoming year. Both chambers’ proposed budgets would only get the state’s child care centers through about nine months before facing yet another shortfall.

During the Senate Appropriations/Base Budget committee meeting June 20, Sen. Ralph Hise (R-Spruce Pine) said the bill is a “band-aid” before the legislature returns in January. 

Both chambers’ budgets “lack the funding needed to fully support child care and the early education system, including funding for subsidy and NC Pre-K,” a spokesperson for the N.C. Department of Health and Human Services said. 

The Senate budget “does support quality child care,”  the spokesperson said, pointing out that it does not change the state’s star rating system for child care centers, which the House budget undermined.

When House members considered amendments to their proposed budget on Wednesday, they pushed off any star rating system changes until next summer.  

‘Definitely tied to salary’

The Senate’s spending plan would maintain the 3 percent raise for state employees passed in the last budget. The House’s plan adds an additional percent to that raise for state employees, plus more money for state retirees.

The state employee workforce has a 25 percent vacancy rate, according to Suzanne Beasley, a lobbyist for the State Employees Association of North Carolina

“That’s definitely tied to salary,” Beasley told lawmakers at the Senate Appropriations/Base Budget committee meeting on June 20. 

The Senate also proposed $259 million in recurring funds and $100 million in nonrecurring funds to Medicaid to account for changes in program costs. 

Those funds are on top of the $720 million in adjustment funds provided in last year’s budget, Hise said.

The bill is expected to go to the Senate floor June 24.

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