As the North Carolina General Assembly battles over a budget for fiscal year 2016-17, state employees are forced to wait for answers.

Nothing is set in stone as of yet, but talk has swirled about teacher pay raises, retirement plans in need of cost-of-living adjustments and the potential rise in costs of health insurance.

A few weeks ago, Gov. Pat McCrory announced his proposal to give teachers an average 5-percent raise — a move praised by many.

However, an average of 5 percent does not mean a 5-percent raise across the board, according to Dr. Don Phipps, superintendent of Beaufort County Schools. The pay raises are expected to be determined on a scale, based on teachers’ number of years teaching.

Phipps said a raise could be as low as 3 percent for one group of teachers and as high as 9 percent for others.

“I have not seen that breakdown yet,” he said. “We just wait for the work to be done.”

Last year’s approved pay raises for teachers gave newer teachers the largest raise, as well as an increase in base salary, with veteran teachers receiving little or nothing. Phipps said most of the newer teachers are funded at a local level, so when the raises came down the pipe, the school district had to come up with a lot of the money.

At this point in the budget process, the Senate is proposing a larger pay increase for teachers than the House, which proposed an average 4-percent raise.

 

COST OF LIVING

As for retirement, however, Beaufort County Schools is better able to prepare for any changes in local funding responsibilities.

At the state level, the House of Representatives most recently proposed a 1.6-percent cost-of-living adjustment for teachers’ and other state employees’ pensions.

COLAs help to maintain the value of a retiree’s pension, despite growing inflation over the years. The Senate’s latest proposal didn’t allot funds for any adjustments.

Richard Rogers, executive director of the North Carolina Retired Governmental Employees’ Association, said the General Assembly has surplus funds to expend this fiscal year, and while a COLA was difficult to allot during recession years, those funds are available now.

“I think retirees understand things have been tight,” Rogers said. “It is very difficult for them to make ends meet.”

Although a COLA wouldn’t be too much money, it could make the difference for retirees. Rogers estimated that the House’s proposed 1.6-percent COLA would total about $62 million.

Beaufort County has about 2,100 government retirees, including educators, and choosing not to allot a COLA at the state level affects the economy locally, according to Rogers.

“It has an economic impact,” he said. “It doesn’t allow them to spend money in the economy.”

 

HEALTH INSURANCE

Along with potential shifts in pay and retirement pension COLAs, teachers and state employees are also facing potential increases in the cost of the State Health Plan.

Over the years, the overwhelming trend has seen the costs of health benefit plans rising more quickly than employees’ compensation. Not only that, to cover the rising costs, more money must either come from the state or from employees’ pockets, according to The Segal Group Inc., which presented this information to the State Health Plan Board on June 3.

In 2015, the state’s eastern region, in which Beaufort County is included, had the third-highest per member per year costs with the State Health Plan out of 16 regions statewide. Cost growth came in at 2.9 percent, or the sixth lowest out of 16, according to Department of the State Treasurer documents.

Beaufort County’s designated region includes nine other counties: Washington, Pamlico, Dare, Hyde, Lenoir, Tyrrell, Jones, Craven and Carteret.

“The Senate is maintaining a $71 million reserve for the plan. While the State Health Plan has made progress to slow the rate of cost growth in the plan, we want the board to stay focused on lowering costs and keeping the plan affordable and viable,” Sen. Bill Cook stated in an email.

If state employees are asked to pay more for health insurance this year, Phipps said it would likely eat away at any pay raise allotted to them.

“I don’t really call that a raise,” he said. “Clearly, there’ll be more money out of pocket.”

 

‘WE JUST DON’T KNOW’

Again, Phipps said it is hard to say at this point what will happen. Until the General Assembly nails down an official budget, all the school district can do is wait.

“You’re waiting and listening to see if there’s a major change,” Phipps said. “We’re not stalling. We just don’t know.”

On June 2, the Senate passed a $22.225 billion budget and sent it to the House for approval. However, the House rejected the proposed budget several days later.

The next step is for legislators to create a conference committee to hash out the differences.

The General Assembly hopes to have the budget for fiscal year 2016-17 on McCrory’s desk by July 1, the beginning of the new fiscal year.

Until then, all teachers and other state employees can do is wait.