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RALEIGH, N.C. (AP) — North Carolina legislators exchanged budget offers Tuesday as negotiators formally met for the first time to discuss how to reach a new government spending plan for the upcoming year that starts in one week.
House and Senate negotiators met behind closed doors at the Legislative Building for more than an hour, breaking up in the early evening. They could meet again Wednesday. Both chambers passed rival plans in recent weeks that spend $21.1 billion but differ on spending for their priorities for the budget year starting July 1.
"I think at least they understand where the numbers come from on our side and maybe we understand their numbers more as well," said House Majority Leader Harry Brown, R-Onslow, and chairman of the Senate negotiation team, after the meeting.
Gov. Pat McCrory's administration is keenly interested in the final product because he'll be asked to sign the budget adjustments into law. A two-year spending plan through mid-2015 approved last year remains in effect if no agreement on second-year charges is finalized on time. But McCrory and State Budget Director Art Pope told state agencies Monday to prepare for less money while the negotiations continue.
Medicaid continues to be a negotiation obstacle. Budget proposals from the House and Senate and the governor set aside different amounts of money to spend on unprocessed provider claims delayed by a new computer billing system and for expected growth in the new year.
In a memo to Brown earlier Tuesday, Pope wrote the state doesn't need to set aside the additional $352 million for Medicaid the Senate included in its budget, but says McCrory is willing to spend more than he proposed last month. Budgets by the House and McCrory would increase Medicaid spending less and put money in reserve.
The state budget office "still respectfully disagrees with the Senate's 'worst case' scenario for Medicaid based on old estimates," Pope wrote.
But Senate leaders said the General Assembly staff members are now warning of additional unexpected costs. Brown estimated such costs at from $20 million to $40 million for the current fiscal year and a similar amount for next year.
Before Tuesday's negotiation session, lawmakers discussed aloud whether they could adjourn for the year without budget adjustments, or at least after making a small set of changes, such as raising teacher pay. McCrory and top Republicans have made pay raises for teachers and state employees a necessity before adjourning the session during this election year. Lawmakers want to leave Raleigh for good in the next week or two.
Democrats, representing the minority in both chambers, want more involvement in the budget negotiations, but that's unlikely. Only one Democrat — Rep. Bill Brisson, D-Duplin, is among the negotiators. He was one of a handful of Democrats to vote for the House budget.
House Minority Leader Larry Hall, D-Durham, called on Republicans to hold negotiations in public view after he said GOP leaders misled House members about a budget provision a couple of weeks ago involving lottery funds. The budget envisions $106 million in extra profits to pay for teacher raises, but documents released last week calculated advertising changes would cut those extra profits by more than half.
"I'm asking for more openness," Hall said at a news conference. "You now have to earn back the public trust."
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