Plan Provides More than $10.8 Billion for Schools, Cuts Taxes, Ensures Secure Communities

Gov. Mike Easley today signed the budget agreement passed by the General Assembly for the 2006-2007 fiscal year. He commended the legislature for enacting a plan that keeps education the state's top priority by providing more than $10.8 billion in resources to improve education.

"Investments in education continue to be our No. 1 priority in North Carolina," said Easley. "This budget provides nearly $1.4 billion more this year in new support for pre-k through the community college and university systems in addition to targeting resources to reform high schools and help our low-wealth school districts.

"Our continued commitment to progress in education, coupled with our top-ranked business climate, makes North Carolina one of the best locations to grow and expand a business not only in America, but in the world.

"I commend the legislative leadership for their hard work in delivering a timely budget package that not only invests in education, but also ensures secure communities and provides tax relief."

Highlights of the budget adjustments for the 2006-07 fiscal year include:
* Increasing North Carolina's Commitment to Education - Provides an additional $943 million General Fund resources to education above 2005-06 levels, including teacher salary increases and bonuses, in addition to an anticipated $425 million in N.C. Education Lottery revenues for pre-k, class size reduction, school construction and college scholarships for those who cannot afford to pay.
* Recruiting and Retaining Teachers in the Classroom - Includes $323 million for a teacher salary increases averaging 8 percent (paying for a step increase and increasing every step by $2,250), $10 million for an additional step at the top of the salary schedule, and $90 million for ABC bonuses. In addition $3.3 million will provide expanded teacher-training opportunities through the community college system, scholarships to prospective teachers, and more professional development for teachers and principals.
* Increasing Resources for Low-Wealth and At-Risk Schools - Provides full funding for the low-wealth formula through an increase of $42 million and provides $27 million for disadvantaged students.
* Continuing High School Reform - Provides nearly $10 million to expand Learn and Earn to 19 additional sites expected to open this fall. The Learn and Earn program allows students the opportunity to graduate with a high school diploma and a college degree after just five years of study. In addition, the plan provides $4.2 million to continue Easley's high school reform effort that creates smaller theme-based high schools that better link students with the workforce.
* Improving Literacy in Middle Grades - Provides nearly $5 million to place 100 literacy coaches in middle schools across the state and an associated $1.0 million in support for the N.C. Teacher Academy to provide training in reading.
* Increasing Higher Education Opportunities - Provides more than $86 million in additional resources to community colleges and the UNC system to serve growing enrollments. It also provides more than $22 million in financial aid.
* Growing the Economy and Creating Jobs - Expands the One NC Fund by $15 million and provides $5 million for Small Business Innovation Research grants for entrepreneurs to match federal monies to create new businesses, continuation of JDIG and additional support for growing industries through biotechnology programs and motorsports incentives. Since 2001, JDIG and One NC programs combined have helped create more than 30,000 jobs and $5 billion in additional investment across the state.
* Improving Mental Health - Provides almost $100 million in new funding for the Division of Mental Health/Developmental Disabilities/Substance Abuse. This includes $29 million to replace federal cuts in community-based services, $14 million for the Mental Health Trust Fund and $14 million for local mental health and substance abuse services. The budget also authorizes the construction of two new psychiatric hospitals serving the eastern and western parts of the state.
* Supporting Early Care and Education - The N.C. Education Lottery will provide for 3,250 more four-year-olds to be served through the More at Four program. Also, the state will provide $14 million in state funds to increase child care provider rates and reduce childcare waiting lists and $13.5 million for the Smart Start program.
* Protecting the Most Vulnerable - Provides $10 million in support for adoption and foster care services, replacement of federal cuts in child support and child protective services and additional support for domestic violence prevention.
* Ensuring Secure Communities - Provides $27 million to improve the court system for 90 new assistant district attorneys, investments in information technology and more court personnel. The budget also provides funds for upgraded technology for local law enforcement officials, protection against convicted sex offenders, and SBI agents to address drug and computer crimes. The Highway Patrol will receive an additional 4 state troopers.
* Increasing Access to Health Care - Requires the Secretary of Health & Human Services to construct and execute a plan to increase health care access for the uninsured through the use of federal waivers and resources. The budget also includes a new health insurance tax credit for small businesses.
* Preparing for Natural and Medical Emergencies - In addition to the new disaster relief fund to cover emergency preparation and first responder costs, the budget includes funds to construct a new state public health laboratory and a new emergency operations center. The budget also supports the purchase of antivirals for emergency responders and front line health care workers.
* Strengthening Government Ethics Infrastructure - Provides a total of nearly $1 million to the Secretary of State, the State Board of Elections, and the Board of Ethics to strengthen government ethics oversight and implement new lobbying rules.
* Cutting Taxes - Provides almost $200 million in tax relief for all North Carolina consumers through a reduction of A,A¬ percent of the state sales tax effective December 1, 2006 and a reduction of A,A¬ percent of the state's top marginal income tax bracket effective January 1, 2007.
* Increasing Funding for Road Construction - by $195 million through a reduction of the longstanding transfer from the Highway Trust Fund to the General Fund. Then Gov. Jim Martin and the General Assembly had put the transfer in place in 1989.
* Capping the Gas Tax - at current levels to avoid an expected increase on January 1, 2007. The budget would allow the use of rainy day fund revenues to hold the Highway Funds harmless for the effects of the gas tax cap.
* Maintains Fiscal Discipline - through the provision of an anticipated $323 million to the Rainy Day Fund and over $220 million for repairs and renovations projects.
* Supporting the Lowest-Paid Workers - Includes Easley's request of $8.5 million to ensure that noncertified school employees, such as bus drivers, janitors and cafeteria workers receive compensation that brings them above the poverty line and provides equivalent treatment to other state employees.