Governor Proposes Nation’s Most Ambitious Education Budget

Gov. Mike Easley today released the nation’s most ambitious budget for public education. His budget provides funding for a new “EARN” scholarship initiative that will allow students from low and moderate income families to earn a debt-free university degree. At the same time, the budget expands the early-college Learn and Earn program statewide. The budget increases spending for public schools, community colleges and universities by 7.8 percent to $11.6 billion.

“In North Carolina we place a premium on hard work and it should pay off for our people,” said Easley. “Making college more accessible to hard-working students, making high school more relevant and challenging, and making sure low income families can keep their hard-earned dollars for basic needs are North Carolina values.”

The Governor’s budget expands Learn and Earn high schools statewide so that the program can reach every student in every corner of the state. Learn and Earn allows high school students to take college courses at high school and earn two years of college credit or an associate’s degree with just one extra year of study. His budget calls for $19 million to establish Learn and Earn Online so students in any high school in the state can take college courses over the Internet.

His budget also provides $150 million for the next two years to send to and graduate more students from college. Low-and moderate-income students will benefit from a new financial aid program that combines a two-year state grant with current federal assistance that will replace the need for loans if students work 10 hours a week to help pay for their education. Therefore, students who complete the Learn and Earn program with two years of college credit will be able to finish their four-year degree at a state university debt free.

In addition, the Easley budget fully funds enrollment increases in the state’s public schools, community college and universities to build a skilled workforce prepared to compete for 21st century jobs. It includes a 5 percent average pay increase for public school teachers to fulfill his commitment to surpass the national teacher-pay average by 2008-09. In addition, 10,000 more four year-olds will be added to the More at Four pre-K program, which now serves nearly 20,000 at-risk students. Easley also provides money for the Disadvantaged School Supplemental Fund as well as to add literacy coaches and school resource officers.

“This budget keeps education our Number 1 priority,” Easley said. “My goal is to create a seamless education system that provides opportunities for citizens from pre-K through community college and our universities. Our education system must meet the needs of all our citizens, whether they are just starting out in school or returning to learn new skills to meet the demands of our global economy.”

The Governor’s budget also eliminates the state income tax for nearly 600,000 low-income taxpayers and cuts in half the tax for another 630,000. The budget provides funds to help middle-class families who are feeling the financial squeeze from the rising cost of health care. A new Kids Care package will help more than 12,000 children in families who earn $40,000 to $60,000 a year, or 300 percent of the poverty level for a family of four. Also, the budget provides funds to extend Medicaid health coverage to foster-care children from age 18 to 21. He also includes funding to reduce the waiting list for child care subsidies and increase community access to physician and mental health services. The budget funds higher education scholarships for foster care children, increases the capacity of the independent living programs and calls for a new adoption tax credit based on the current federal tax credit.

The budget includes money for the One North Carolina Fund which has generated the creation of 25,000 jobs and $3.5 billion in investment. It also provides support for new and emerging companies through investments in biotechnology and in the Small Business Innovation Research matching grant program.

The budget recommends an additional $238 million in the State’s Rainy Day Fund and $100 million for the repair and renovation of university and state buildings. By the end of the current fiscal year, the Rainy Day Fund balance will be $849 million, 4.9 percent of last year’s operating budget.

Specific recommendations in Easley’s budget include the following:

• Increase North Carolina’s Commitment to Education – An additional $839 million for education above the 2006-07 levels, including salaries and benefits. The budget fully funds enrollment increases in the public schools, community colleges and universities. The budget expands More at Four with 10,000 additional slots.
• Continue High School Reform – $7.5 million to ensure operation of 55 Learn and Earn schools in 2007-08 to improve graduation rates, student performance and competitiveness; $12 million to expand broadband high-speed Internet access in schools and establish Learn and Earn Online to make 20,000 community college and university course offerings available to high school students statewide in 2007-08 and 40,000 in 2008-09; $7.3 million to improve and expand distance learning for community colleges; $4.2 million to improve distance learning for universities; $2 million to continue the high school turnaround initiative and assistance teams.
• Recruit and Retain the Best Teachers – A step and flat $1,240 to increase average teacher pay by 5 percent while making the state’s beginning teacher salary more competitive.
• Provide Resources to Low Wealth Schools – $18.9 million increase for the disadvantaged-student supplemental fund for smaller classrooms.
• Improve Literacy – Add 100 more literacy coaches in middle schools.
• Increase Access to Higher Education – $50 million (reaching $100 million in 2008-09) for EARN scholarship program so low and moderate income students can graduate from college debt free and $29 million for UNC Need-Based Grant Program to keep college affordable. Provide tax deductions for higher education tuition.
• Expand Economic Opportunity – Extend small businesses tax write off expenses; $15 million for the One North Carolina Fund to recruit new and expanding industries; $5 million for the One North Carolina Small Business Innovation Research Program; $3.5 million for the N.C. Biotechnology Center; $3.8 million to upgrade and streamline freight rail operations.
• Protect the Most Vulnerable – Eliminate state income tax for 545,000 taxpayers and cut the tax in half for another 629,000; $4.7 million to create N.C. Kids’ Care health care plan for 12,000 children of low-income working families to complement Medicaid and N.C. Health Choice for Children; provide subsidies for an additional 2,000 foster children of low-income working parents; $2 million to support National Guard members and their families through the National Guard Family Assistance Centers and for Operation Kids on Guard to help children of Guard members on deployment; $1 million for welfare and recreation grants to North Carolina military bases; $1.5 million through the Housing Trust Fund for a home protection pilot program to aid workers who have lost their homes due to the volatile economic climate; add two new migrant labor housing inspectors; $2 million for Dial-A-Ride and other public transportation systems.
• Strengthen Community Security – $13.6 million to expand prison capacity; provide school security officers for every middle school; $11.3 million for continued implementation of the VIPER communications system so local and state emergency responders can effectively communicate; $7 million for additional judges, prosecutors and court staff to move cases more efficiently; $3.7 million to update court technology; $3.6 million for equipment to enable the Highway Patrol to perform aerial rescue operations; $2.7 million to complete upgrades and expansion of the Statewide Automated Fingerprint Identification System; $840,000 to complete use of global positioning systems to monitor sex offenders; $500,000 additional for the Crime Victims Compensation Fund; $2.2 million to implement and comply with the federal REAL I.D. Act for secure drivers license and identification cards.
• Protect Our Natural Resources – $6 million for the N.C. Agricultural Development and Farmland Preservation Fund; $5.5 million as a state match to federal drinking water funds; $2.6 million to match EPA clean water funds; $5.3 million to strengthen emergency preparedness efforts by continuing the identification, monitoring and mapping of natural hazards and man-made threats; $370,000 to enhance the ability of the state’s seven Hazardous Materials Regional Response Teams to save lives and property; $1.3 million to replace the end of federal support for the State Energy Office; $100 million in certificates of participation for land and water.
• Capital improvements for education, public safety, environmental and infrastructure projects – $487.3 million in general obligation bonds for University System projects including East Carolina’s School of Dentistry, Western Carolina’s Health and Gerontological Sciences Building, UNC-Chapel Hill’s Genomics Facility, and the NC State University Companion Animal Hospital; $310 million to increase prison capacity for projected growth; $37 million for five new Youth Development Centers; $100 million in special financing state conservation land acquisitions; $250 million in general obligation bonds for water and wastewater system improvements; and $35 million in general obligation bonds to be added to $20.5 million in gifts for a new Tryon Palace history education and visitors center.