Hello Jonathan,

36% of state employees leave during their first year of employment.

Gov. Roy Cooper unveiled his budget proposal this morning and acknowledged the current crisis in employees leaving state government.

But his budget proposal picked winners and losers and illustrates precisely why most state employees now leave after one budget year – because that's all it takes for them to receive the message loud and clear that they are not a priority.

Most state employees would see pay raises of 5% in year one and 3% in year two of the biennium if the proposal passed (far less than the current inflation rate). It also includes a $1,500 bonus for state employees making under $75,000 annually and a $1,000 bonus for those earning over $75,000.

Conversely, teachers and principals would receive an average of an 18% increase over the next two years. Somewhat inexplicably, classified school staff would only receive a 9.5% increase over the next two years.

Cooper's proposal would increase leave amounts for early-career employees and add a 1% retention payment to the longevity system after two years.

His proposal also stops well short of the 7% increase needed to fund the State Health Plan fully and does not hold the Plan harmless for Medicaid expansion. This will leave the Plan in terrible shape and will likely lead to a pay cut two years from now for state employees when their out-of-pocket costs will almost certainly increase.

Highlights of Cooper's budget proposal:

• 5% raises for state employees in year one; 3% increases in year two for a total of 8 percent. 1.5% on top of that for employees in a step plan (Correctional Officers, Probation/Parole) and non-certified school personnel, for a total of 9.5%.
• $1,500 bonus paid in two installments (October 2023 and April 2024) for employees making less than $75,000 annually
• $1,000 bonus paid in two installments for employees making greater than $75,000 annually
• Universities and community colleges would get an amount sufficient to pay the same raises for their employees (including EHRA and SHRA employees)
• $30 million for Community College faculty raises
• Retirees would receive a recurring 2% COLA in year one plus a 2% bonus, then a 1% bonus in year two
• Full funding of the retirement system
• Fund the State Health Plan at 5% (the Plan needs 7%)
• Increase in annual leave to give more days earlier in career
• Longevity/Retention payments will start at the two-year mark at 1%.
• an average of 18% in raises for teachers and principals over the next two years
• 3% in salary adjustment reserve funding to all state agencies, the UNC System, and the Community College system to address wage compression and other pay inequities. Agencies can use funds to address pay for 50 percent of their employees (increase from 25 percent)

It's important to note that the governor's budget is mostly symbolic when the other party controls the House and Senate. House leaders have stated they hope to pass their proposal by Easter, and then a compromise with the Senate will be sent to the governor before the start of the fiscal year on July 1.

With a veto-proof majority in the Senate and needing just one vote for the same in the House, it would be hard for the governor to kill the legislature's budget.

SEANC's lobbyists are on the ground at the legislature daily, pressing upon lawmakers the need to tackle the vacancy crisis head-on with meaningful investment.

Thank you,

Ardis Watkins

SEANC Executive Director