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Patrick Gannon: 5 big state budget questions

RALEIGH – The last week brought an optimistic tone to lingering budget negotiations on Jones Street, but plenty of important issues remain undecided as the budget impasse reaches its third month since the start of the new fiscal year on July 1.

Legislators now have until Sept. 18 to pass a spending plan for the 2015-16 and 2016-17 fiscal years or extend the deadline for a fourth time. Here are five major items still in the mix as talks continue between the House and Senate over how to divvy up $21.74 billion.

Funding for teacher assistants and teachers: The House wants to fund teacher assistants at roughly last year’s levels, but the Senate wants to spend some teacher assistant money on new teachers in order to decrease class sizes in early grades. A few weeks back, teachers and teacher assistants showed up at a legislative hearing to make their case to keep assistants in classrooms.

Julie Fogt, a first-grade teacher at North End Elementary School in Roxboro, said teacher assistants start and end their days driving school buses, and in between teach small groups of students struggling with reading or other subjects.

“With instructional time in the classroom being so important, we need teacher assistants to be able to help ensure every child is receiving the education they need,” Fogt said.

But Senate leader Phil Berger, an Eden Republican, said in a recent interview on Domecast, the News & Observer of Raleigh’s weekly political podcast, that senators believe data is convincing that lowering student-to-teacher ratios in kindergarten through third grades would help students learn. The Senate budget moves in that direction.

“Our belief is that once you get the ratio down to 1:15 or 1:17, the need for the teacher assistants in those early grades is diminished substantially,” Berger said.

How to generate and spend lottery money: To try to increase sales, the Senate budget would allow the lottery to spend an additional $10 million a year on advertising. It also would let the lottery launch “E-Instant” games that could be played on computers or smartphones. The House budget would not. The chambers also differ on how to allocate more than $500 million in annual lottery earnings for education. The House wants to spend more of that money on teachers and teacher assistants, while the Senate earmarks much of it to noninstructional support personnel in schools.

Historic preservation tax credits: The House hopes to create a new historic preservation tax credit program to encourage the redevelopment of old buildings. It budgeted about $8 million a year for the credits, as well as nearly $200,000 to administer the program. The former historic preservation program expired at the end of last year, and the Senate wants to keep it that way. The only way the new program will become law appears to be through horse trading during the budget process.

Film grants: The Senate budget includes $10 million a year. The House budget is more generous, allocating $80 million over two years to promote the production of movies, TV shows and commercials in North Carolina.

Retiree cost of living adjustments: The House budget would give retired teachers and state employees 2 percent cost-of-living raises. The Senate would not.

“That’s an issue that we are still in discussions with our Senate colleagues on,” said Rep. Nelson Dollar, a Wake County Republican and the House’s senior budget chairman, at a news conference last week.

Can the two chambers come to compromises on that issue and the others listed above by Sept. 18?

The clock is ticking.

Patrick Gannon writes columns for Capitol Press Association.

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