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Joint | July 9, 2014 | Chamber | Budget meeting pt 1

Full MP3 Audio File

Joint Conference Committee will come to order. Joint Conference Committee will come to order. Joint Conference Committee will come to order, members will take their seats. Any other conversations please take outside, we are pleased to have with us some pages today, Elzabeth Bryant from Wake County, sponsored by Rep. Tillis. Lindsay Dew from Wake County sponsored by Rep. Duane Hall, Mary Glen Ryan from Chowan, sponsored by Rep. Steinburg, Libby Henderson from Lincoln County, sponsored by Rep. Saine, Kailynn Norville from Edgecombe County, sponsored by Rep. Tolson, and Monique Stuart from Guildford County sponsored by Rep. Ridell. Thank you, pages, for being here and welcome to the committee. Our Sergeant-At-Arms today for the House today, Bill Blass, Mike Clampett, Warren Hawkins, Bill Morris. For the Senate, Steve Wilson, Ernie Sherall, Bill Fitcher, Hal Roach, Canton Lewis. We appreciate them with us. To make sure that people understand the notice and the prior agreement between the House and the Senate conferees, the House will have an hour this morning and the Senate will have an hour this morning chairing the meeting, and we will equally divide the time that we take in this afternoon's meeting as well. The House is subject for this morning, we'll have an offer at the end of our presentation. But what we do have, what is in your hands, you have one handout that we are providing for you on impacts of the loss of teacher assistant positions within the various counties, however the House and its presentation is going to use some live individuals to comment on impacts and assessing the impacts and the reason why the House feels as it does with respect to teacher assistance. And we have a few people to come up and make some comments here at the dais that I will be calling on, they will make some remarks for about 3 or 4 minutes. If any of the members of the conference committee have questions of them, we will take those questions, we will move through those individuals and- [SPEAKER CHANGES] Mr. Chairman? [SPEAKER CHANGES] Sen. Brown? [SPEAKER CHANGES] This is a meeting of the conference committtee, made up of conferees. I think you're aware that if you're not a conferee that you're not even allowed as a member of the House or Senate to make comments on this meeting. The Senate would oppose or object to any outside speakers as we work through this process, if the House needs to take a recess to hold a House appropriations meeting or a House conferee meeting and would like to talk to individuals, we would be glad to do that. But this is a meeting of conferees to discuss the differences in the budget and try to work through the differences, and I just think that's an important point we need to make before we move forward. [SPEAKER CHANGES] Sen- [SPEAKER CHANGES] And also yesterday in our meeting, Sen. Harrington, who chaired, objected to any outside folks making comments as well yesterday. [SPEAKER CHANGES] Mr. Chair, Chairman Brown, The House of course did not object to that particular individual. With the House chairing, we want to make our presentation and the best way that we know to make our presentation is not with the audio/visual, but with individuals. In reviewing the rules for the conference, of course as you know

no rules in a conference committee and a conference committee can do as it wish. It often hears, sometimes, from members coming in occasionally from the administration that will come in to conference committees. I recall those in the past when we've had the State Treasurer over to talk. We've had different folks to come in and speak to conference committees before and there is nothing in the rules that we agreed to for these meetings that prohibit it. [SPEAKER CHANGES] Mr. Chairman, if I could respond to that. When those individuals come to speak that's when both parties are in agreement. I think the rules of this conference committee is that it has to be a majority vote from both the House and the Senate on any change of rules and I would be more than welcome to have that vote if you'd like, but again, our position is that this is a meeting of conferees. We'll debate anything you'd like to debate. We'll take recesses. We'll do whatever you need to to get information but, again, even our own members in the House and Senate aren't allowed to speak at this meeting. I don't think this meeting should allow others unless both parties are in agreement. [SPEAKER CHANGES] Mr. Chair. Can I make a comment please? [SPEAKER CHANGES] Well let me respond back, just very briefly. What we had agreed to was that the Senate would have the control of its hour of time, publicly, the House would have control of its hour. We are controlling our hour and we're going to proceed with our presentations at this time. [SPEAKER CHANGES] Well then, Mr. Chairman, I think this meeting's adjourned. [SPEAKER CHANGES] Well, the House is not adjourned and we will call the first individual to speak. Mr. Heath Morris, who is superintendent of Charlotte and Mecklenburg schools, if he is here and would come forward. Mr. Heath Morrison, come right up here, and if you would, Mr. Morrison, if you would press the button so that it's green and you can speak and the question that we have for you to respond to, and we do want to continue to hold our time limit, is the House's position is we believe it would be very difficult to implement budget reductions of in the range of 200 million dollars to reductions to teacher assistants and we would like your front-line perspective as someone who has to actually implement the budget decisions that we make in the State of North Carolina. Mr. Morrison. [SPEAKER CHANGES] Absolutely. Thank you very much. Good morning. Dr. Heath Morrison, Superintendent Charlotte and Mecklenburg schools, very honored to have this opportunity to speak. I really want to start off by thanking all of our legislators for what you do. The importance of the policies and budgets that you decide. The direct impact on how we're able to deliver a world class education to students all across North Carolina, or as we say in Charlotte and Mecklenburg, every child, every day, for a better tomorrow. I want thank our law makers for listening. I feel like, in this short session, there's been more productive dialogue and the opportunity to voice areas of looking at legislation and policies that have been enacted and ?? teacher assistants. When you look at the financials on that the teacher assistant, on average, makes $19,000. If we have to layoff 817 teacher assistants in Charlotte and Mecklenburg that's 817 teacher assistants who would then need unemployment and health insurance totaling over $14,000 so the net average for the state would be $5,000. We don't think that's a good return on investment. And so, we know that there are difficult decisions to make. We respect those difficult decisions. We ask the policy makers come together to find a way to give good teacher salary increases, which is so fundamentally important, but not to do it by decreasing K12. In 2002-2003 K12 education accounted for approximately 42% of the state budget, today it's 38% of the state budget. If we were simply to go back to the percentage of the budget that we were in 2002-2003 there will be 668 million dollars available to find a way to give teachers great raises without

teacher assistance. So again we respectfully ask our legislature to come together, to work together and help us find a way to increase student achievement. Again, as we say in Charlotte and Mecklinburg, "Every child, every day, for a better tomorrow." Thank you. Mr. Chair. [SPEAKER CHANGES] Thank you Mr. Morrison. Speaker Tillis. [SPEAKER CHANGES] And Mr. Chair, I was added to the conference committee today, so I'm not speaking outside of the rules. It was a hard fight, but I got it done. [SPEAKER CHANGES] Rep. Tillis, your addition was noted this morning by the Chair. [SPEAKER CHANGES] May I ask a question of Dr. Morrison? [SPEAKER CHANGES] Proceed. [SPEAKER CHANGES] Dr. Morrison, I know that you understand the budget, the 2 year budget that was put into place. [SPEAKER CHANGES] Right. [SPEAKER CHANGES] And the difference that we have right now comes around the same issue, I think the House shares your concern with the disruption to the classroom and it not being necessary. If you were to look at the proposal that exists today that would elimiate close to 7,000 teaching positions, and some 800 in Mecklinburg County, and dealing with the budget that was passed last year, which of the two would you prefer? Because one, it does include pay raises, but which of the two would you prefer if you look at it that way I don't want to ask an unfair question, but continue down the path that we passed last year, or continue down this other path that would result in 800 teachers being eliminated. [SPEAKER CHANGES] So I've never actually seen this movie but I remember a movie called Sophie's Choice, and you're asked to decide which of the two children? I don't think any of those scenarios are particularly appealing, obviously what would be advantageous in Charlotte and Mecklinburg, and I can only speak for Charlotte and Mecklinburg about continuing the budget that was passed last year, was it would allow us not to make substantial cuts, 817 million, 817 teacher assistants, it's about altogether 32 million of cuts to CMS including transportation central office. That would be devastating with other cuts that have happened in CMS over the last several years. Just to give you some information that we know, over the last 5 years in CMS our overall budget, federal state and local's increased slightly over 40 million, most of that federal, our health and insurance, just one aspect of our budget's gone over $60 million, and we've increased over 10,000 students in that time. So to take more cuts would be devastating, however the challenge would be if we proceeded with the budget that's entacted, then obviously teachers would be getting no salary increase and that would be very problematic because right now, I think it's one of the most challenging aspects we're facing in our state. Not just in education, but in our state. [SPEAKER CHANGES] Just one followup. [SPEAKER CHANGES] One final followup. [SPEAKER CHANGES] The House proposal is an average of 5%, and I think the current Senate proposal is somewhere around 11%, can you speak to some of the cost issues associated with the higher number in terms of the impact on cost of the county? [SPEAKER CHANGES] Absolutely. One of the things that people may not understand is, I know you do very well, is that when the state enacts any sort of pay increase, not all of our employees, teachers and classified workers are paid through state funding. And so what we need to do is then adjust our budgets to whatever the salary increases at the state level for our employees paid by both federal and local funds. In terms of the various budgets being proposed, the local impact of the House budget right now we're estimating is around $9 million. The impact of the Senate budget in CMS would be about 13.6 million to complete that raise of 11% for all employees. Our county commissioners have put in about 7.3 million in reserve, so either we'd need to go back to our county commissioners if the Senate's budget were to pass, and ask for additional funding or we would have to cut $6 to 7 million to fund the Senate budget proposal. [SPEAKER CHANGES] Chairman Holloway. [SPEAKER CHANGES] Thank you Mr. Chair, and I just want to thank you for taking time out of your day to come and spend with us, I hate that our counterparts didn't want to stick around to hear some of your comments, but TAs are certainly important to us here in the House and I heard you say that you would be losing in Mecklinburg about 817 positions, can you take just a couple minutes to touch on a couple things and talk about how TAs are helpful in the classroom with student literacy, particularly in grades like Kindergarten, first, second grade, and then maybe take just a minute to talk about just how TAs also can assist with disabled children and how that they play a vital role in the classroom when you have a child that is in you class that is potentially disabled. [SPEAKER CHANGES] Absolutely, thank you sir. Teacher assitants

are some of the most well trained, qualified in our schools. A lot of times when you see a classroom with a great teacher and a great teacher assistant sometimes it's hard to differentiate. In fact, many of our teacher assistants have teaching credentials but for various reasons choose to accept the role of the teacher assistant. The really are one of the best bangs for our buck that we have in our state. For reading, these individuals help in small groups with children who are struggling readers, students who already start off in kindergarten already behind, not knowing any sight letters. They can able a teacher to work with a group of struggling readers while they take the more proficient readers or visa versa. They can provide one-on-one direct instructions, scaffolding instruction, helping with reading comprehension, phonetics, all sorts of ways to address that and they are exceptionally well trained. We've invested in their training so they are able to deliver instruction at a high level. You also have teacher assistants, as you well know sir, that are working with students who are identified on an IEP, meaning individual assistance. So these particular teacher assistants meet the specific needs of a group of students with special needs or, in particular, a one-on-one level type of instruction. So again if, in Charlotte we have over 145,000 children but we dedicate ourselves to this concept of every child, every day, for a better tomorrow. Teacher assistants allow us to deliver on that concept of every child. The last thing is I know that there is some discussion of research out there that is showing that teacher assistants have maybe not as much impact as some people would presume. I would invite any legislator to come in to any one of our schools and I'm up here today with two other superintendents. Please come in to our classrooms. See what these teacher assistants do. See how they impact instruction. See how they make a better circumstance for our children. And again, I would love to see the research because I have never seen any of this research I just know what works and what works are great teacher assistants in our classroom. [SPEAKER CHANGES] Mr. Chair, just a real quick follow-up and it's not a question but a statement. Thank you for your answer and I'm with you. I want to see this research as well and I actually did a little homework last night and I found research that says that teacher assistants are valuable and that they do help do these things that you just advocated that they do and thank you for your comments. [SPEAKER CHANGES] Thank you, sir. [SPEAKER CHANGES] Thank you, Mr. Morrison. I want to call up Mr. Frank Till, Superintendent of Cumberland County Public Schools. We're going to try to make sure we get everybody in and if we have time at the end we will come back for some additional questions of any of these individuals. Superintendent Till, the floor is yours. [SPEAKER CHANGES] Thank you, Mr. Chairman. Thank you for allowing me to come. First off, on behalf of our superintendents in Cumberland County, we appreciate the work that the legislature's done, both the Senate and the House, to address some of the things that we felt were maybe not where we want them to. So if the Senate was here, or they're listening, thank you for your effort in some of the things such as third grade reading, the grading of the schools, and some of the test cores. We appreciate that. Today we've been asked to come and talk about the impact of TA cuts on our system and we do that without any reluctance. In my system I try not to call them teacher assistants. I try to call them peer professionals because when you walk into a law office you don't call them legal assistants you call them paralegals and they're highly trained and they're able to do things. The same is true of a medical office, the same is true of a dental office. So I call them peer professionals. In our system, if we are to look at some cuts right now, we would be looking at 276 of those people not being with us next year. What that means to us is, unlike some other systems, we in fact use our TA's to drive our buses. So every TA is required to have a CDL to drive a bus to be a substitute bus driver to get our kids back and forth to school. So we're already looking at the impact, what would occur to us on transportation as we pulled even more resources out of the classroom to do the mundane thing of simply getting the kids to school, which you know is very, very important. In Cumberland County, in the last five years, we've gone through a recession. I understand that we've had to cut budgets. Although we're not as large as Heath in Charlotte, we're at 52,000 students, we've cut 500 people in the last year, in the last five years. So we've gone from a system of 7,000 employees to a system of 6,500 employees which means that we've trimmed our central office, trimmed our central office, trimmed our central office, and trimmed our central office. We've also had to raise our class size based on county leveling funding and things such as that. We're still moving forward and we've made a commitment to raise student achievement. For us, ours is true north.

every child making growth based on their potential. And our TA's are part of that. He did an excellent job of summarizing. If you look at Cumberland County over 60% of our kids are on free and reduced lunch. So they bring some different baggages into our schools based on poverty and based on the TA many of them who come from the community that they reside in were able to deal with that liaison to the community and help the children so that, in fact, the teacher doesn't have to teach to the middle of the class but, in fact, we can differentiate and move around and meet the needs of the students. Without our TA's it would severely impact our curriculum. I believe it still would severely impact our teaching staff and still make it possibly not as desirable as simply a pay raise would do. The research on pay raises, by the way, is that pay raises are short-term motivators not long-term motivators and that the long-term motivators are conditions, working conditions, and we're working hard on that. And part of being a working condition, particularly in the younger grades, is to have a TA, or as we call them a peer[??] professional, to work with you. So I appreciate the work of both the House and the Senate. I appreciate your moving on teachers' pay and recognize that that, we as superintendents, as we meet, we thank the Governor and both houses of the legislature for listening to superintendents. We are here to tell you, to the best of our ability, the impact on any decision, how it would impact our districts and impact our children. So thank you very much for the time. [SPEAKER CHANGES] A quick question or two if, well we've got two inquisitors here. Speaker Tillis. [SPEAKER CHANGES] Doctor Till[??], a couple of questions. One would be to, and I'm going to give you a slightly fairer question than I gave Dr. Morrison on the choices, as the Chief Executive of your school system you've got two proposals on the table and that's really, in essence, what we're trying to work out here to get the budget done, and it has to do with the pay raise. As the Chief Executive of your school system, when confronted with an 11% pay raise or a 5% pay raise and all that comes with it which of the two do you want? [SPEAKER CHANGES] I want the one that, as we've said as superintendents, I want the one that gives our teachers and makes us the most competitive without the Draconian cuts. And so the reality is if there's not going to be any new revenue and there's not going to be either new taxes or sin taxes or things such as that and we have to live within the revenue I'd rather not make Draconian cuts and give a smaller raise. Given a choice, and I'm not in the legislature, I would do something to raise revenue but that's not a choice on the table. [SPEAKER CHANGES] We agree on that. [SPEAKER CHANGES] Representative Holloway. [SPEAKER CHANGES] Thank you, Mr. Chair, and Speaker Tillis. We wanted to be careful here and you know I like to make wrestling references. They're going to call us the Rock & Roll Express if we're not careful and I've got dibs on being Ricky Morton so, and for you all that don't know that I grew up in Wilkes County and I loved wrestling so. But thank you for being here with us too and taking some time out of your day as well. And I want to touch on something that Speaker had touched on and you answered it for me a superintendent perspective, I'd like you to touch on that from a teacher perspective. Do you think your teachers would like to give up their resources, such as TA's, to get that 11% raise or do you think they would be more satisfied with what we see as a fair and reasonable raise of a little over 5% and keep the TA's and keep the resources? And then I wondered, if you could, touch on the fact that the money that we give counties for TA's, some of that money, because of some of the cuts that go back probably more than a decade, is used to hire teachers. I think our staff says roughly 64 million dollars to the TA allotment is actually used to hire teachers. How would that impact your school system as far as having to potentially let not only TA's go but let teachers go? [SPEAKER CHANGES] There was a couple questions there. As I've talked to my teachers I've talked to my principals, the quality in the classroom is really based on a team and the team goes everything from the literacy coaches to the classroom teacher to the peer professional or TA. And so as we begin to talk, and I met with principals the last couple days, they've been talking about things such as third grade reading and the commitment to that and again, I congratulate the legislature, it's too long we haven't in this country talked about every child reading by third grade. They've talked about how it's going to be hard to achieve that without the peer professional or the TA in the classroom. So I would say that in the short term they would celebrate their buying power but in the long-term I think you would hear more complaints about the lack of TA's. What was the question? [SPEAKER CHANGES] The other part was about

The dollars that – the flexibility to use those for teaching positions. Well, the reality in North Carolina, in the system I know well in Cumberlain County, we get money from a wide variety of sources. So actually the budget cuts to our TA’s instead of cutting half, would cut about two thirds. So we actually put more of our state money into TA’s or para-professors, I use them interchangeably so, forgive me. But that’s because we also use dollars from other places for teachers, so for us, we look at a total budget and then meet the needs of the student, so for us if it simply was, you’ve got to cut them, we’d cut about two thirds or about three hundred TA’s. [SPEAKER CHANGES] Thank-you Superintendent Till. We will move on now, and hear from Superintendent Sue Burgess from the Deer County public schools. [SPEAKER CHANGES] Good morning. I am Sue Burgess, Superintendent of Deer County schools. I’m very proud to have finished 25 years of service to the North Carolina public schools, 11 of those years as a classroom teacher, and I think that gave me the strong foundation that I needed to understand teachers and the way they think. It has been a very good resource for me as a superintendent. I can remember a day, back in the 70’s or 80’s in North Carolina public schools, when teacher assistants might have had a very different type of job than they have today. I remember when they might take turns with the teacher or the teacher assistant being in the classroom when someone was out. Those days are long gone. The way that teacher assistants are used today by the teachers is to break into smaller groups. This is especially essential for the focus on literacy that we have now. I have seen much greater focus on literacy with the advent of read-to-achieve. I have seen classrooms where, when you walk in, you won’t know which person is the teacher assistant, and which one is the teacher. You won’t be able to tell. That’s one of our goals. You will see, maybe, students in groups of five to eight, and someone is going over with them, manipulatives – perhaps that was for math instruction – but you would see them practicing their phonics, their literacy skills, and you will see them at different stations. And I would invite - [SPEAKER CHANGES] Ms. Burgess. You might want to bring that mic up just a little bit closer to you there. Thank you. [SPEAKER CHANGES] Is this better, now? [SPEAKER CHANGES] Yes. Thank you. [SPEAKER CHANGES] Ok, thank you. You will see them working in stations and you will see tremendous productivity. You won’t see downtime, and you won’t see teacher assistants used just for an extra set of hands. It’s used for instruction. We too have many of our teachers assistants are actually trained teachers and we’re proud of our record of promoting teacher assistants into teacher positions when we have them available. It’s hard for me to address how we would cut teacher assistants because we party had to cut them down to what we think is the bare-bones essential minimum because of budget cuts in recent years, so I’m really hard-pressed to say – we’re down to bare bones on teacher assistants and we would have to take our money and cut other essential services or supplies that students need. I couldn’t emphasize enough how important teacher assistants are to providing literacy and also relieving a little of the stress teachers do – I mentioned read-to-achieve in a positive light – I do feel that way but teachers feel tremendous stress because they then want their students not to succeed and really rely greatly on the help of the teacher assistants. They are a team. They do work together. They plan together as professional learning communities – plan instruction and they’re able to target individual student skills where the student is weak so this would be a tremendous blow to instruction to lose

on teacher assistants. I'm very pleased to have that the legislature is talking about making progress for North Carolina teachers, where we rank in the nation with pay. I'm very afraid that we are going to lose teachers to other professions and to other states. So I'm very glad that this topic has come up. I'm glad that you're very serious about moving forward but we can't do it at the expense of other essential services such as transportation or central office. Dare County is a small county, 5,000 students. Our special ed department at central office is one person. You can't cut that by 5%. In a larger district you might have, I don't know, more people in a department. Our departments are one person. We really can't sustain any more cuts there. We've had 16% cuts to our central office funding since 2008 but we still have all the added responsibilities to implement curriculum when curriculums change and that falls on central office to provide that leadership and oversight. So we would be very hard pressed to cut our central office and if you've been Dare County on vacation, I hope you have, but if you've driven the roads of Dare County you know that our map looks like this. We are spread out over 400 square miles and our transportation services are not easy to provide and we can't sustain any cuts to transportation. It's a very challenging thing to transport 5,000 students the distances that we do and get them there on time and not to have bus routes that would last over an hour. I want to thank you again for this opportunity to appear before you as a person in the field who lives this every day I'm impressed that you want to hear from me and I appreciate that opportunity. [SPEAKER CHANGES] Chairman Johnson. [SPEAKER CHANGES] I forget about a microphone when I'm talking to Sue. I want to personally apologize for the walk out today. I'm sorry we could not find a way to videotape or chart you in order to be considered acceptable. I don't know if this committee knows but these three superintendents are not only bringing us information today, like Dr. Morrison. I did not realize the unemployment impact that that would have on our state and I appreciate that information. And Superintendent Till for bringing to our attention that there, some moves are short-term goals and some are long-term goals and depending on which proposal you choose you determine what your goals are going to be. And I also want to thank Sue. Sue has to travel a long way, Superintendent Burgess, to explain to us about the superintendent's view of the pair professionals, as Superintendent Tills says. Don't know that you all know that in the years previous to this when we had to, as a budget, had to cut 2.5 billion dollars out of our budget that we needed to go to experts and I want to tell you these people have helped us through that process and made it less painful. I am eternally grateful for that. Wonder why I was appointed Chair at that time when I realized at 2.5 in the hole we didn't have a lot of people running and applying for it. But anyhow, I wanted to thank you so much and I do appreciate your efforts on such a short notice. Thank you so much for helping us find our solutions. [SPEAKER CHANGES] Thank you, Representative Johnson. [SPEAKER CHANGES] Speaker Tillis. [SPEAKER CHANGES] Superintendent Burgess, first I want to thank you. You've been a part of an advisory group that's helped me and I know that we haven't satisfied you in all the decisions we're making, it's a process of give and take, but I do think the Senate did a great job with the Read to Achieve Program. My concern now is that with the differences, or the choices we have on the table now, that it undermines the opportunity that we have to help these children read by the end of third grade. Can you talk a little bit about the practical implications of losing those teacher assistants? Particularly in grades two and three. And tell me a little bit about what a classroom with

Look like with a TA in there, working on read to achieve versus a classroom with the TA gone? [SPEAKER CHANGES] Well, the students would be more in large groups or whole group instruction, or they might be sitting by themselves with no one if the teacher wanted to work with only say 15 students at a time or 8 at a time then she would leave maybe 8 to 15 unattended working on their own, seat work. Some students are good at that, but some are not. If you throw in some exceptional children who mainstreamed into the environment without the TA, once again, the teacher might have to take her time away from the whole class to manage one or two students who might be having a particular difficulty. So with the teacher assistant in there you might see three groups and two of them might have an adult, but the other smaller group might be reading a leveled readers and have for a short period of time which is much more manageable. Students can do better on their own for a short period of time, and then they kind of rotate through stations. If you have two adults that’s going to be much more productive and more time with an instructor than if you only had one adult. [SPEAKER CHANGES] Further questions. Thank you very much, Superintendent Burgess. Thank you for coming up. In the interest of time we've got two individuals that we’re going to bring up at the same time and then we’ll use the balance of our time listening to them and making, inquiring questions. Sherry Schliesser, I apologize I probably have that incorrect, a principal here in Wake County, and Becky Bishop who is a third grade teacher. If you all could come on forward. [SPEAKER CHANGES] Mr. Chair this is a point of order. As the speakers are coming up, there was a motion to adjourn. I don’t think it was seconded or taken up so we’re still officially in the conference committee, is that correct? [SPEAKER CHANGES] That’s correct. [SPEAKER CHANGES] Good job on the pronunciation. It was great. It was right on, yes. [SPEAKER CHANGES] I will not try it again. [SPEAKER CHANGES] You did well. Hello, my name is Sherry Schliesser, and I am a principal in Wake County public schools and a small highly, socially, economically, disadvantaged school in the western part of the county. [SPEAKER CHANGES] I’m Becky Bishop. I teach third grade in Franklin County. I am nationally board certified and a veteran teacher of 15 years. I also being in Franklin County is understand the socioeconomics and the ruralness of the community. [SPEAKER CHANGES] I have been in education 44 years. I spent 32 years in the classroom, never wanting to leave, and then all of a sudden I needed to go a little further and so I went into administration. So for the last 12 years I have been in administration. I walk my halls of my school carrying my teacher heart and my teacher brain with me every step of the way. For many years I've worked with teachers, teacher assistants in the classroom. I have seen that role evolve from the person who does all the paperwork and the clerical work. We used to call them clerical assistants. Now in my building we call them instructional assistants. Every teacher assistant in Wake County has to have the equivalent of an Associate’s Degree. When you look at their hourly salary and you think of what we’re requiring them to do just to get this job, I wonder sometimes why we have applicants. Especially when they know when they come into our building, they’re not going to stop from the moment they get into our building until they leave in the afternoon, sometimes even taking work home with them. We train them. We put them through professional development, and then we also ask them to do bus duty, lunch duty, a lunch duty that is required by our state for, because our teachers have to have duty free lunches, and someone has to watch those children. They do hall duty. In my building I have a rule that children are always within our eye

Eyes view and our hands grasp. We can't have children running willy nilly to the bathroom or for emergencies or to the office when they loose their tooth or when they have a physical illness. So they always have to be within eyes view always within hands reach. And without teacher assistant that becomes quite difficult. Let me give you a tale of two classrooms and it's been presented before this. But I'll give it to you from my view point, my viewpoint of being an educator for all these years and now a supervisor of a building. Two classrooms, one with a teacher one with a teacher and a teacher assistant. Same amount of children. Twenty four in some cases, sometimes a little bit lower a little higher. In the classroom with just the teacher, you have the teacher directing all those children with all their different needs. As a legislative body, you ask us every day every year, to provide personalized instruction for every child. You ask us to leave no child behind. But think about this picture of the teacher and the twenty four students, how does one person divide it up to meet all there needs? If you're over in a small group with children of a certain need then you've got children building...this is what I love I love to walk into a building into a room and see children reading to self while their building a fort with big books, lets say. Because they have an attention span of a very short amount but yet these teachers digging in to try and help these children with their phonics or their comprehension or learning to pick out the main idea of a story. Let's look at the other classroom. The teacher and the teacher's assistant are working together they are planning together. They know the needs of the children because they look at the data together and they divide and conquer. They divide and conquer so that children have a personal chance for a better lives instruction in their daily routine. In my building I want every child that walks into the classroom regardless of where they come from, regardless of their background which is varied, to have a chance to grow a full days worth before they go home to their parents and whatever background they come from. We can do that a lot lot more efficiently and effectively if we keep our teacher assistance in place. I appreciate you listening to me. SPEAKER CHANGES: You said that so well and I would just like to reinforce that. This is what I do and I would just like to share a couple of stories with you. One as a classroom teacher that teaches third grade with a lot of stress and pressures. And two as a parent of a child who has gone through the I E P process. And do first I'd like to start off by saying that I haven't always had the opportunity of having a teacher assistant in my classroom because I taught fourth grade for a very long time. However being moved down to third grade I now have a teacher assistant for forty minutes a day. Not nearly enough. But I can tell you that in those forty minutes magic happens. She comes in, she knows exactly what's supposed to be happening because we talk and we plan and we share and we take responsibility for those children together. She loves those children the same that I do. She learns them and she grows them and she helps them along whether it's guiding leading a guiding a literature circle. Or whether it's remediation for my child in third grade whose reading on a first grade level and still needs assistance with side words. Or whether during that time frame she's working with my academically gifted children and she is working with them in a computer lab on a power point on a independent project that they're working on because they have already achieved what was necessary for this particular unit. Teacher assistance and not only that she has an associates degree and is currently working on her bachelors degree in education so she is highly qualified and she has no problem jumping in and getting her hands dirty every single day no matter what group of children she is working with. She takes them with her when she leaves the room even though they remain with me.

You can just imagine what it would be like to have a full time teacher assistant in my classroom as we do individualized instruction through M class and all of the requirements that are now upon us with Read to Achieve. When I am doing those individual assessments, and I can certainly attest to this, if she was not in that room, all of my little babies would be there, doing seat work, busy work. There would be no instruction. But during those individual assessments, she comes in and she takes the lead and she teaches, and she works with those small groups. And they rotate through. And they work with her, and then they work independently. So let me tell you a little bit about my daughter Samantha. She had a speech impediment at a young age and because there have been teacher assistants in her classrooms from Kindergarten through second grade, she has now been able to overcome that. Because there was that teaching assistant in there, her teacher was able to work with her on her IEP goals in the classroom the same way that she would've gotten if she were in a pull out situation but with speech that doesn't happen. So she received the instruction and the guidance and the extra work that she needed from her teacher because there was an assistant in the classroom helping with the other students. So teaching assistants are an invaluable part of our schools, and they are part of our foundation in elementary school that provide quality education for all of our students, not just my child, but all of our children. Thank you. [SPEAKER CHANGES] Questions from conferees. Representative Johnson. [SPEAKER CHANGES] Thank you so much for coming today, and let me start with that. You were explaining that you have forty minutes with a paraprofessional teaching assistant, and you, at one time, taught without one. I would like to know what you consider, how you consider that forty minutes on what you're able to accomplish. Like, what percentage or how much better do you believe you are as a teacher, using that tool, as a teacher, not using that tool. [SPEAKER CHANGES] Well, in about forty minutes I believe we probably get at least an hour and a half worth of material done, that it would take me, alone, as an individual. [SPEAKER CHANGES] So, so you're, follow up, mister chair, I'm sorry. So you're saying that forty minutes not only did that teacher work, I mean that assistant teacher, but your, I'm going to say eight hour day, I really know how long your day is, but in an eight hour day, you increase that to nine and a half? Do what you thought you could do in nine and a half? [SPEAKER CHANGES] Yes, ma'am. [SPEAKER CHANGES] Representative Brown. [SPEAKER CHANGES] Thank you, mister chair. Thank you ladies, so much. I've heard in the discussion, I just had a quick follow up from one of you, you said that teachers are mandated to have duty-free lunches. How will that work without a TA? Do teachers simply go without lunch, because if they've got to accompany children, then who is, who can take their place without a teacher assistant? Thank you. [SPEAKER CHANGES] That is a really good question. A lot of times I guess it would fall on administrators, counselors, clerical workers in the, it has to happen so it's just ingenuity that would make it happen. It would be extremely difficult for it to happen. We've often thought about perhaps rotating duty-free lunch so that you had it every several days while one person, which would not be ideal because then every several days, then somebody's got to do that duty and they have no time away for good behavior, I say. Everyone needs a few moments away to gather their thoughts, eat their lunch, usually they're running off papers or planning during that time. [SPEAKER CHANGES] Representative Holloway. [SPEAKER CHANGES] Thank you ladies for coming and being with us today. I appreciate it very much, and I just want to take just a second to touch on, we know we've got lots of testing in the lower grades and I'm sure that TAs are very valuable in helping with proctor these tests. How would a school have to handle that, take the TAs out of the equation. The teacher themself, they need a proctor. I think the law even requires an extra person in the room. How would you handle that without the TAs?

I'll go with that one as well. We would have to rely on the goodness of volunteers and then those volunteers would have to be trained. The unfortunate thing about bringing in volunteers for those jobs is that folks in our school understand the importance of having no cell phone to cause a test mis-administration or they know what to do for a child who all of the sudden gets sick in the middle of the test to try to eliminate that test administration because of this. So it would cause a lot more of those test mis-administrations to occur without that knowledge. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Let's see, we have one more minute. I think we are completed. Principal Sleshure[??], I got that correct, and Ms. Bishop we appreciate you being with us this morning and sharing with the Conference Committee. Thank you all very much. At this time, I guess we've, we haven't taken, I guess, a full hour given that we started at about ten after but our Senate colleagues are back and we appreciate that and we welcome them back to the discussion and as per our agreement we will turn the gavel over to them for their portion of the agenda. [SPEAKER CHANGES] Thank you, Chairman Dollar. We are back and we're ready to get started. Senator Brown. [SPEAKER CHANGES] Thank you, Mr. Chairman. I'm sorry that it had to get to the point it got to a while ago but I think it's important that I just touch on a few things. I spoke to Representative Dollar about 30 minutes before the meeting started and told him about, or went over with him the rule process on how this meeting should take place. And there are rules for a Conference Committee and rules require a majority of vote on both chambers conferees to take a position. And I told him at that time that we didn't think outside speakers, we weren't ready for outside speakers and we couldn't agree to that. And also the rules require that the Chair notice an agenda an hour before the meeting begins. The House did not notice their agenda properly. Conference Committees allow negotiations among the designated conferees. Several of our Senate and House members who are not conferees are not permitted to speak. I think that's important. And if the House wants to take public comment on appropriations bills they're welcome to do it in House Appropriations Committees. The purpose of today's conference meeting is to negotiate and move the process along. And that's what we had hoped to do today. Having said that, I know teacher assistants are important to the House and we understand that and we understand that this process takes a lot of negotiation. It takes a lot of give and take as you work through the process. We could have found about ten speakers to come in here today and counter everything that was said earlier in the past hour about teacher assistants. There's a lot of information out there that will counter all those comments. In June there was a News & Observer article that talked about teacher assistants that there's 450 million dollars earmarked for teacher assistants and about 90 million of those dollars are transferred by the systems to other pieces of education. Not used for teacher assistants, 90 million out of 450 million moved out of teacher assistants that are designated for that. That's almost one year that we're talking about that's not even used for teacher assistants. That's in a June article in the News & Observer. As we try to move forward in this process I think all of us wanted to make education the priority in this session. We looked at some history in where our priorities have been. In '03, in '03, this body spent just under 2 billion dollars in Medicaid and just over 6 billion dollars in education. In the '12-13 budget we spent 3.5 billion dollars in Medicaid and about 7.8 billion dollars in education. So we've spent over 1.5 billion more in Medicaid and over 1.6 billion more in education. The Medicaid increase is 77.4

...percent. So we've increased Medicaid spending by 77.4% while at the same time we've spent 26.9% more in education. Our priorities have been in Medicaid for the past ten years. We have felt like, for one year let's make education the priority. Again trying to move forward with this process is not easy. And is sounds to me like teacher assistance is the most important thing to the House. But we think teacher pay is the most important position. If that's the case, if that's the case, the Senate's willing to take you teacher assistant position if you'll take our pay raise position. And we'll start with those numbers, and we'll back the budget out from those two numbers. If that's where the priorities need to be, then let's start there. If teacher assistants are the key, then we'll give you the teacher assistants position. We think it's important on teacher pay, to get it near the national average. That's our priority. So let's start with those two numbers, and let's work up a budget based on those two numbers. That's an offer we're willing to make. Now, there's going to be some hard decisions that have to be made to do that. I think we all know that. But I think on the Senate side we're willing to make those decisions and we'll make that happen and we'll make education the number one priority in this budget session if everybody in this room wants to do that. But again, we're going to have to make some hard decisions to move forward. The Senate has made five offers, the House has made three. Yesterday and today we talked about Medicaid--not Medicaid, we talked about lottery and we talked about salaries and benefits. Yesterday we put kind of an offer on where we could go to resolve the lottery issue--we get no response from the House. They stalemate. The same rhetoric over again after we make a proposal. Then we talked about the salaries and benefits and laid out our plan. We gave up a key piece, a key piece, which was the tenure piece, to try to move these negotiations forward. Again, no response from the House, no offer. Representative Holloway said it best yesterday, "We can be here till Christmas if you want to." And I can promise you, the Senate's prepared to do that. If we want to play these games and go back and forth, over and over. But the Senate is not prepared to make offer, after offer, after offer, with no response back from the House. I think it's time for the House to understand that this is a negotiation. Somebody's going to have to come to the middle to settle this. We're willing to do that. Or we can take the positions that you're trying to take, and fund teacher assistants fully, we'll fund our pay raises fully, and we'll back into a budget from those numbers. We're open for debate. But again it takes movement from both parties to solve this. With that, I think the House may have an offer. If they do, we're willing to take a look at that offer, and we'll try to move forward. But again, we're willing to start a budget process with the teacher assistant piece, the pay raise piece, and back into the rest of the budget if that's what the House wants to do. [SPEAKER CHANGES] Yes, sir. Chairman Dollar. [SPEAKER CHANGES] Thank you. A couple of points that I would like to make, and one is, with all due respect to the ?? observer, I would think that it's better to base education policy less on what comes out in the newspaper and more on what our Superintendents are saying. Those individuals, the actual professionals who have to operate these budgets... One of the reasons we felt is was important to bring folks forward is that if these are going to be public meetings, then let's have some public input, let's hear from those folks who actually have to operate on the ground that we are putting our children in their hands. We are setting the expectations for them, as everyone knows. We are not only setting expectations and growing expectations, as we should, and we are obviously funding it, and we need to have those partners at the table and make sure that we are listening. Now, with regard to the...

Offer I suppose as it is to say OK we'll have all the teaching assistants and we'll have the eleven percent payraise. The question is always the budget is not just one or two items. A budget has to all work together. Now if we were flushed with money, if we didn't have a revenue short fall this year we could probably meet all of these needs without any concern. But we are where we are we have the revenue that we have and obviously we have to fit our budgets into that revenue. We can not make promises out there that do not fit within those numbers and do not fit with saying ok the impor...what's not being said is, "Hey where are you getting that other money from.?" Where are you balancing that on. And if we're saying if we're implying that we're going to balance that on the backs of the medically needy people on this state and quadraplegics and folks that are in facilities and the like in wheelchairs. I mean I'm assuming that that's not what their talking about I certainly hope not. We need to fit all of these items in certainly the funds that are available now. We do have an offer for you that we will hand out to the committee when y'all are ready for it. SPEAKER CHANGES: Mr. Chairmen. ?? Representative ?? I appreciate the offer the only thing I will say is this isn't your committee it's a joint committee meeting. And before you decide what the rules are gonna be you need to get an OK from the Senate and earlier today I told you our position on certain things and you decided that you were gonna be the rule maker of this committee. And the Senate is not gonna allow that to happen it's a joint committee, it's rules that we both agree on. Not just what the house agrees on. Saying that I'd love to see your offer. SPEAKER CHANGES: Senator tailmen. SPEAKER CHANGES: I'm sure we're all waiting to see that offer, I believe we put up about five and I think maybe it would be an order. But if we're to believe Representative Dollar it would be ?? sense January, May when we came here and prior to that we've not listened to certain ?? They've known about our pay proposal, they've known about the cuts in the teacher's assistance and I've talked to them and some of them are upset. We've offered a deal today to let you have them all back or even better than that increase about four thousand teachers and put them in the classrooms. Do away with the teacher assistants and put in these K through three classrooms and do away with the teacher assistance. You got another option that you can consider. They're are all kind of plans out there but until we can get something back..but it's as if we've heard from Serpent Dennis, you have this nice show but I've talked to Serpent Dennis and have been there and you'll talk to them individually and they'll tell you what's on their mind. And every...once in a while we'll get 'em up here and they'll sing a different story. We put a thirty percent cut in there for DPI. The superintendents have told me year after year they're no help we can do that ourselves and yet they start to scream when DPI calls them and says hey we need some support. So you got to, you gotta figure that all out. You know I can get a dog and bone to show up here and have people say what they want to. We need to make a decision at this point. We've called people in in this budget process and we've heard from 'em on both sides, I think it's time now to make a decision and get the hell out of here. SPEAKER CHANGES: Chairman Holloway. SPEAKER CHANGES: Thank you mister chair, I did want to respond just for a moment to comment about money being transferred for other things so we spoke to staff this morning they said it was eighty three million I think the Senator said ninety something but we won't debate the number. But had we stuck around in here we would have found that sixty four million of that was transferred to fun teacher positions and we're still talking about positions. It's great I'd love to be able to do eleven percent for teachers I'm happy that we've got tenure off the table. I'd love to be able to fund the TA's...

budget’s a set of dominoes. The domino that you’re going to flip over is you’re going to have to take the money from the aged, blind and disabled, period. It’s the only place to get the money from and we’ve got a problem with that, and yes, we’ve got five offers. I’m not sure what some of the offers were, but we’re committed, we want to work this out. I understand that this is a public meeting. We wanted to have a public meeting. What’s wrong with bringing the public involved with it and having the people that it actually impacts? As far as DPI’s cut goes, 30% sounds like a lot but it’s not that much money. It doesn’t solve the problem, doesn’t solve the TA problem, doesn’t solve the salary problem, doesn’t solve the Medicaid problem, so we’re willing to work this thing out. We’ll sit here, we’ll negotiate. I dug the Christmas slots out yesterday. If we need to sit here that long, we will, but we want to get it done and we’ll do it here today. [SPEAKER CHANGES] Senator Apodaca. [SPEAKER CHANGES] Thank you, Mr. Chairman. I don’t know whether we should draw names for Christmas or maybe set a limit on what we’re going to spend, but it looks like we’re headed that way. We have balanced our budgets on the backs of K-12 and teachers for the last 30 years, and I think it’s time we look at another way and turn the tide and go the other direction. This is a conferee meeting; this is not a public comment meeting. The Senate side, we’re more than happy to back up our numbers and to present them and to debate them. We don’t need outside sources to come in and talk about our positions, so we need to move on. [SPEAKER CHANGES] I agree. Any other questions from conferees? Representative Dollar, would you like to get the Sergeant-At-arms to distribute your offer? Do all conferees have a copy of this offer? If you’re a conferee and you do not have a copy, if you would raise your hand. If you’re a conferee. It appears they have them. Chairman Dollar, would you like to walk us through this? [SPEAKER CHANGES] Thank you Mr. Chairman, and… [SPEAKER CHANGES] Would you mind going ??? That way if we get questions… [SPEAKER CHANGES] Sure. [SPEAKER CHANGES] Thank you. I’ve asked Chairman Dollar to go to the ?? in case we have some questions. Thank you, Chairman Dollar. [SPEAKER CHANGES] Yes sir. Theo only other… As I present this, there was a question raised a moment ago about joining this and doing things jointly, and I would just have to observe that that was something that we had tried to discuss months ago, was to set joint targets and to do a lot of things jointly and to get together HHS for example jointly and the like. Unfortunately those things didn’t happen jointly, and I kind of wish that they had. Maybe we’d be further along. But to present the House offer, and what you’ll see here, the lines that are different, there’s not a whole lot different at this point, but to explain where we are, the reversion number is a little different from the Senate offer. This is

at 9, 393, and the reason why it is at 393 is that we understand, and we're subject to being corrected on this. We understand from staff that's the correct number after the money that was put into medicaid. That this would be the final reversion number. But we're happy to, it's basically $5 million from the Senate number, but if that's not technically correct, then certainly we're going to wanna go with the technically correct number. The offer has $20 million in repairs and renovations, the other numbers on page 1 I believe are the same as what we have had there. On page 2, we obviously have the same numbers and we've updated our numbers in here with regard to the various subject areas to match the agreed upon Senate and House targets what those subcommittees are working on currently. We had removed, and I think we may have removed this previously, but anyway we have removed out the lottery money that was not going to be realized, obviously the issue is still there with the $29.5 million that we'll deal with. The adjustments that we've moved up to now with regard to Health and Human Services are $96 million. I believe most of the other numbers, we've moved the risk reserve obviously out to where the risk reserve is, I would note from last week, as everyone recalls, and we appreciate the movement yesterday Sen. Brown, and of course we would also recall that we moved $129 million in the House last week, which we viewed as a pretty substantial movemen tof money to get in agreement with the Senate with respect to Medicaid and Medicaid risk reserve. What we have on page 3, what you see there is the numbers that equate to the salaries and other reserves that we had mentioned, and then the contingencies on the back, the transfers to be determined. I know there's always already we've got discussions on those, and hopefully we're fairly close on most of those when we get to that. A question that I would have, and obviously we have accounted for in Health and Human Services that there are $73 million that would not be able to achieved from the Senate's reductions and we have accounted for that in our overall budged. We beleive that what we have in front of you is a compromise proposal that meets our needs within our revenue and is balanced and sets the appropriate priorities that everyone has been discussing, and that is keeping resources in the classroom, raising teachers' salaries, raising salaries for state employees, as has been promised and providing sufficient, or in our view maybe more than sufficient resources for our Health and Human Services issues. And with that, I'll be happy to answer any questions Mr. Chair. [SPEAKER CHANGES] Thank you, Chairman Dollar. I have one question Mr. ??. Could you explain to me, I thought I understood you say you were

dollars has changed, but the number appears to be the same as in the last Offer. Did I misunderstand you? SPEAKER CHANGES I was just clarifying for the public purpose, and that is that the initial lottery dollars that were in the budget that we passed had to be adjusted and we made those adjustments. So the only thing in contention on the--there's two things in contention on the lottery money. There's the 29.9 million, and whether we're going to have that in availability or not have that in availability. The other item that's in contention is more in the detail of the distribution of the lottery money in terms of the Ford funding and how the Senate did that and then how the House did that and it's about a 20-million-dollar--there are about three items in there and it nets out to about 20-million-dollar difference. Just in terms of the distribution of the money, kind of how it shows up in the budget. SPEAKER CHANGES As a follow up, then, just humor me a little bit. This 165,868,473--does that include the 29 million you're talking about could be in question? SPEAKER CHANGES And I apologize. Which line are you on? SPEAKER CHANGES I'm on the Educational Lottery Receipts. SPEAKER CHANGES Yes. Yes sir, it does. SPEAKER CHANGES. Thank you. SPEAKER CHANGES We have Senator Brown. SPEAKER CHANGES ?? Mr. Chairman. So in the lottery piece, you're still taking the 19 million Ford funding piece and putting it back in as availability? The other ten million that you found--help me clarify, I'm just--or was it 20 million? Where's the other availability money coming from? SPEAKER CHANGES There's ten million in there that kind of offset each other, and it might even be helpful just to have the staff to walk through those differences on the distribution of the lottery money. Because, you know, it's something we've got to discuss anyway. SPEAKER CHANGES But in reality, nothing has changed in your position on the lottery. SPEAKER CHANGES That's correct. And the reason why I bring out the distribution issue is obviously it's a 20-million-dollar availability issue. It has nothing to do with 29.5, whether that stays or goes. But it gets more to how, between the two bodies, how we would do those particular distributions. And it might be helpful to have the staff just talk about those differences there. That way everybody can be clear on what those differences are. SPEAKER CHANGES What is different in this offer than the last offer I guess. The lottery's not different, the pay's not different, what's different? SPEAKER CHANGES We have corrected some of our numbers, brought numbers up to date, made sure to move some things around, re-looked at everything, and SPEAKER CHANGES But what's different? SPEAKER CHANGES ?? SPEAKER CHANGES Is any--other than just ?? up numbers, what's different? SPEAKER CHANGES There are not a lot of major differences in here at this point. It's very similar to the numbers that were sent to us in Senate Offer Five, were very similar to the Senate Offer Four numbers. SPEAKER CHANGES Mr. Chairman. SPEAKER CHANGES Senator Tillman. SPEAKER CHANGES Senator Tillman. SPEAKER CHANGES With all due respect, Chairman Dollar, this plan moves us nowhere. We've been talking about the lottery dollars--no change. We've been talking about teacher assistants and what we do, and teacher salaries. And to me, this is barely worth the ink it took to write this thing. I don't see any differences, ??, we're not getting these big issues solved at all. We need to make some decisions on those key issues and move on. We made an offer: Give you all your teacher assistants back. Oh no, it might affect something else. Well, yes it will. What's your priority? We said from the very get go, increasing teachers' salaries and making them competitive with the region and the nation. We've stuck to that agenda. And we've offered, today, a major concession. We made a major one yesterday with the tenure, taking it and separating it from the salary. And what we get back is this. We've wasted a lot of time, and somebody else who drew this up--you've moved some figures around, and got nowhere. Absolutely nowhere. SPEAKER CHANGES Senator--Chairman Dollar. SPEAKER CHANGES Senator Tillman, maybe last week didn't happen, but as I recall we moved a hundred and twenty-nine

Million dollars last week, off of the House position. In addition to that, we’ve, in the position that we were beginning to ask questions about yesterday, and then the meeting was adjourned, was in the area of your 228 million dollars in health and human services, which everybody understands 73 million of that is not achievable, that needs to be corrected. We’d like to see that in writing, and with regard to the offer that was made today. The question is where is that money going to come from? I think that the House’s position has been very clear from the very beginning, that we know we need to look at this holistically. We moved forward on Medicaid because we knew that was very important to try and break the log jam at that time, and I think that was a good thing. And I think the Senate’s response to that, in terms of us moving forward with the subcommittees, was a positive thing that was done, and we’ve moved forward this week on those subcommittees, which both sides have and I think that’s been a very good thing. Now in terms of if the Senate wishes to present a formal offer to us on what Senator Brown was discussing and show us how that’s paid for, I think that’s [SPEAKER CHANGES] Representative Dollar [SPEAKER CHANGES] Senator Brown, bring it through to chair please [SPEAKER CHANGES] Let’s assume you take it off our bottom line of 87 million. All right? Our bottom line’s what, 13, 14 million now? Now what’s the offer? [PAUSE] We carry over 87 million on our bottom line, all right let’s assume we take that 74 million, is that the amount? What’s the amount? [SPEAKER CHANGES] 73 million. [SPEAKER CHANGES] 73 million. Let’s take it off the bottom line. Now we’ve got 15 million, right at 15 million on the bottom line. Let’s assume that. Now what’s the offer? [PAUSE] [SPEAKER CHANGES] Your offer? [SPEAKER CHANGES] Mr. Chair. [SPEAKER CHANGES] Chairman Johnson. [SPEAKER CHANGES] I know I may be out of line, but you’re asking us to address a budget that we cannot see in numbers. And your choices are the best of all worlds. We would like to have the best of all worlds too, but that is not possible. We have not addressed the cuts at which you wish to receive all of the best things that are in the budget. So until we see a whole budget, and not a line item budget, what you’re asking us to do is impossible. Now we would like to see an offer, not verbiage. We would like to see some numbers, actually where your cuts are, an actual proposed budget, not a public statement. [SPEAKER CHANGES] All right. I’ll get to you in just a second. [SPEAKER CHANGES] Let me respond, if I could. [SPEAKER CHANGES] Just one second, Senator Brown. [SPEAKER CHANGES] Senator Hise, we need to take these in order. [SPEAKER CHANGES] I want to ask, just going back to Wednesday and that consideration because what makes me a little more nervous about this than anything. On the reversion numbers, as I remember last year, we had the House sitting at 393, the Senate sitting at 383. The offer was we’d make an agreement and split the difference. Which was agreed to here, and now the budget comes back and we’ll go back to the House position after we finish that agreement, because we think we’ve got some different numbers from Staff. In some ways we’re going backwards now and renegotiating things we already agreed upon. And the other side is what we’ve heard from a lot of House members and others, this is what, this item is what’s important to us. So okay, here’s your item. They didn’t say this item in context with the whole budget. So I’m trying to say, why are we going back to discussing numbers we already had come to an agreement on, in calculating those forwards knowing that reversions and everything else is still a guess for another month, until we finalize all reversions? [SPEAKER CHANGES] Chairman Dollar. [SPEAKER CHANGES] It was our understanding from Staff that that is the correct reversion number. Now if there’s, if it’s a different number, we certainly want to plug in whatever the correct number is, so we don’t have any, we have no particular ownership of that number, and if that number is not the correct number, then we’re, like I say we’re more than pleased to plug the correct number in there. It’s our understanding from Fiscal Research that that’s the correct number. [SPEAKER CHANGES] Okay. Speaker Tillis.

Thank you, Mr. Chair. I, well first, Senator Brown I do apologize if some of the notices didn't come out at the appropriate time and we'll make sure that we do better. I think we just need to recognize that, to me, the deal can only, future deals of any substance can only occur if we address the big rocks and the big rock is the fundamental difference in the amount and the source of funding for teacher, or educator raises, since they have employee raises and then some of the proposed cuts for the aged, blind, and disabled. I think that, first I want to compliment you all for suggesting making these conference committee meetings public and for those who have not seen conference committees before this is pretty much how it works it just happens to be public so people could have a field day with pretending that there are great emotions and that we're intractable. I don't think we are. I think this is when we're at our best but I think we've got to have a structured and focused discussion on bridging the gap for teacher pay and having a discussion about the merits of the two positions on age, blind, and disabled and then we'll get done and we can have Christmas in July. [SPEAKER CHANGES] Senator Apodaca. [SPEAKER CHANGES] After those comments I'm speechless. I'm alright, thank you. [SPEAKER CHANGES] Okay. Senator Hunt. [SPEAKER CHANGES] Thank you, Mr. Chair. In my, I'm a very elderly person, I've been through lots of negotiations and normally when somebody makes a proposal and you're trying to get something done the person you make the proposal to comes back with a, at least moves in your direction a little bit. And if they don't it makes you think they don't want to reach any kind of agreement. The way I'm reading your proposal is, in fact it actually moved away from the Senate proposal number five. So I'm just wondering what exactly is going on? It's not even, it didn't even inch closer to our position. Not one bit. Now if you're negotiating you're supposed to get a little bit more close together, some compromise is supposed to be going on. I just want to make a comment, Mr. Chairman, to follow-up on Senator Brown's comments earlier about our spending on welfare versus our spending on education over the years and we've dramatically increased spending in the last ten years on our welfare programs and we've, in the terms of percentage of total appropriations, and we have dramatically reduced our spending on K-12 education as a percentage of appropriations. Now, we all want better results in education and we all want better, we want to take care of those that can't take care of themselves but the bottom line is the best way to keep people off our welfare rolls is to make sure they have a proper education. And the way to do that, we think, and I think you all probably think the same thing, is to have an excellent teacher in front of the classroom. And that's what our whole motivation is. Let's increase teacher pay all we can to make sure we've got the best teacher in front of the classroom. [SPEAKER CHANGES] Chairman Dollar, would you like to respond to his question as why the offer did not move? [SPEAKER CHANGES] I have, well I got a comment on something else first. I have nothing but the greatest respect and have for years for Senator Hunt. He's a great human, person, not simply a political figure and he's proven that time again but I do differ with him. I don't what he's talking about when he talk about welfare. Welfare is not in this budget. I don't see any welfare in this, big welfare line item in this budget. If I assume correctly that what's being discussed is Medicaid, we're talking about billions of dollars that are spent, yes, on mental health, on treating people with mental health disease. We're talking about money that is spent on pregnant women. We are talking about money that is spent on people who get sick, who have diabetes, people who have to go to the hospital, people who are in wrecks, people who get cancer, people who get heart disease, and those know no, they know no bounds of income. We all end up, sooner or later, in a hospital. The question is do we help those who cannot help

Those who are quadriplegic, those who are elderly and can’t do for themselves and have no one to do for them, that we provide shelter for them and some assistance in the last days of their lives. I mean, I don’t see those things as welfare. I see those as us treating our fellow about a hundred and, 1.6, 1.7 million citizens of our state in a very humane way. [SPEAKER CHANGES] Thank you Chairman Dollar. Senator Brown, you still want to respond? [SPEAKER CHANGES] You know I think we all want to take care of those people that are in need, and I think we’ve done a good job as a state, based on those numbers that I went over earlier, on how much money we’ve spent in Medicaid compared to other parts of the state budget. From 1.9 billion to 3.5 billion in 10 years, I think that’s a pretty significant move. And I think all of us want to continue to take care of those people as we move forward. But sooner or later, you’ve got to put some priorities in other areas because what we’ve done in working through this budget process, and if you talk to subcommittee chairs, I think they would agree, talk to JPS subcommittee chairs. I guarantee you they will tell you if they had to go find $10 million in cuts right now, in JPS, they’d have a hard time finding those cuts. If you went to the GenGov subcommittee chairs and asked them to find $10 million in cuts in General Government, where would you find them today, I promise you they would struggle to find those cuts. NER, same thing. They would absolutely struggle to find another $10 million in cuts in those areas. And the reason for that is what we’ve done in Medicaid. Why almost 2 billion dollars to resure, sure up Medicaid costs in the past several years. And because of that, the teacher pay piece has been put to the side, as long as with other education priorities that I think we all have. Sooner or later you know, you just got to ask yourself, when does a Medicaid or HHS budget mean something? Because in the last three years, the HHS budget that we’ve passed as a body, as a whole, all agreed on, has meant absolutely nothing at the end of the year. Because we’ve come back at the end of the year, and had to fill it back in with half a billion dollars, of additional dollars, over and over to take care of it. Now, we can blame whoever we want to blame I guess for it, but in a sense I almost blame this body because we didn’t hold them accountable to their budget just like we hold education or NER or any other subcommittee to their budget. We just said with HHS, we’re going to give you a pass. Your budget doesn’t mean anything, you need another half billion dollars. We’re just going to give it to you. That’s what we’ve done. We’ve done it three years in a row. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Budget meant nothing. Sooner or later, you’ve got to send some type of message that says a budget means something. Because if we’ve got to come back here year after year after year, and find a half billion dollars, to sure up HHS, where do we end up five years from now? Anybody answer that question? Anybody answer it. Where you going to be five years from now, if you continue on that path? I can promise you, you can’t get there. The numbers don’t work. And that’s what we’re running into. We’re starting to get to that point. And these are not easy decisions. I said that yesterday. Putting budgets together are different. And you’ve got to set priorities and sometimes you have to do things you don’t want to do. And that’s what we’re trying to do in this process, is set some priorities, and try to fund those priorities. And then you’ve got to make tough decisions to get to that point. And they’re not easy. I can tell you, I don’t like those decisions. I don’t think anybody does. But sooner or later, that’s what you’ve got to do. What’s the priority in this particular budget? How can we fund it? You’ve only got a certain amount of money. We can’t go print any. You know what the revenue source is. How much money we’ve got. That’s what we can spend. How do we fund that priority? And I guess we’ve got to come together on what that priority is. What’s the teacher pay amount, and what’s the teacher assistant amount?

And then back in it from there, or if it's Medicaid, then let's make that the priority for the fifth, sixth year in a row, let's fund Medicaid again like we've always done. We can go that route and we can give teachers a one percent pay raise, and we move on, if that's what we want to do. But that's the choices you gotta make up here. You gotta set priorities. And I, for the first time, I think we said education's that priority. And I think that's why the decisions are difficult, because we finally did make that decision. And now we gotta figure out how we put it together to make it work. And it's gonna take give and take on the Senate side, I understand that, but it's gonna take it on the House side. And we gotta figure out how we can bridge those. Just throw out, let's throw out some just scenarios, half for teacher assistants, middle in pay raises, is that a compromise? Sounds like one to me. Is that something anyone's willing to do? Let's put it on paper. Look at it. But that's the kind of decisions somebody's got to make sooner or later if we're gonna move this process forward. [SPEAKER CHANGES] Chairman Dollar. [SPEAKER CHANGES] I do. I get just as tired of talking about Medicaid as, Senator Brown, as you probably are tired about talking about Medicaid. But I do have to just bring a couple of points forward and maybe I can do it and maybe we can move on from there, and that is that you do have to analyze what's actually been happening over the last several years in Medicaid, because you can throw out a lot of big numbers, but they don't really tell you what is really going on there in that program. We inherited payments that, after, I don't know, as close to a billion dollars was wasted in the community supports program in the middle of the last decade. When this majority came in in 2011, we inherited a process by which payments were being made to the federal government to satisfy requirements to get back to the feds a portion of what had been wasted out of that billion dollars, and it wasn't even on the budget. It wasn't in the governor's budget, it, the governor produced a budget at that time. And there were other payments that were being dealt with in the same way. There were other issues that were out there, for example, that came up later that were off budget and had never been put on budget and had been allowed to be kicked down the can. There was an issue that, there was finally resolved, actually, this year thankfully. There was a thirteenth payment on the rebates to the federal government on drugs. What had happened was in I believe in 2009 there was a payment due in June of that year that was flipped over, to the federal government, flipped over to July. Okay, that's now been, that's been resolved, that was a huge chunk of money that had to be resolved. There were for a couple of years unfortunately because of the rescue money and other things that were changing so much back during that time the percentages of FMAT, the percentage of federal participation in the program were done incorrectly. And that cost us money that we had to find to fund that because the federal government was only going to fund their portion and not going to fund the state's portion. So it's correct to say that we have invested close to two billion dollars over the last several years in correcting issues, that was a half a billion dollar, ended up being a quarter billion dollar hole in the budget that was passed in 2010 in Medicaid. It was a budget passed with a half a billion dollar hole in it. It was anticipated the federal government was going to supply that half a billion dollars, the federal government only supplied half of that money. So, you ended up with a hole and a lot of, a lot of problems there. And my only point is this, is that we have made progress, the Senate and the House, and the Senate has worked very diligently on this. The House has worked diligently on it. Have worked very hard to correct all those problems over the last several years and it has certainly cost us some money. But it wasn't the fault of the providers, it certainly wasn't the fault of mental health patients, it certainly wasn't the fault of people getting cancer treatments and the like, and so we don't want to, and all those small businesses that are in the healthcare.

industry out there. So- [SPEAKER CHANGES] Chairman ?? [SPEAKER CHANGES] - I would just- If I might finish, Mr. Chairman, [SPEAKER CHANGES] Please, ?? [SPEAKER CHANGES] -I'm close. But the issue keeps coming up, so I kinda have to say my piece on this. We, coming in to the end of this physical year we were in a cash position in medicaid. First time in years that we've been in, I think it was since '07, that medicaid was in a cash position at the end of the fiscal year. So tremendous progress has been made and needs to continue to be made in that program. And obviously there are a lot of additional efforts underway. But getting back to the specifics of where we are with offers, we're certainly interested in, if y'all want to make a formal offer and along any of the lines, Sen. Brown, that you've discussed today, we're certainly very eager to take that into consideration. [SPEAKER CHANGES] Okay. The chair and my discretion, we're gonna be wrapping up and closing comments here and I can assume those were yours, Chairman Dollar. I'm [SPEAKER CHANGES] Maybe. [SPEAKER CHANGES] I am gonna- [SPEAKER CHANGES] Maybe. [SPEAKER CHANGES] I am going to- I don't think that'll probably be the last time I'll be hearing from you, but thank you Chairman Dollar. I'm gonna alleviate a lot of folks that was on the list to speak but I am gonna allow Speaker Taylor as he had raised his hand to have a few comments. [SPEAKER CHANGES] I think Sen. Brown has hit the nail on the head in terms of what we need to focus on. We've got this gap, and I appreciate the spirit of maybe splitting the pay increase in half and going to 8%, but what I think we have to talk about either here or among some of the full chairs, is that still the concern that we have with that is twofold. So Sen. Brown if we get a formal offer that's fine, but to give you some sense of how we would react to it is that at an average of about 8%, let's assume that's about the midpoint. That's still somewhere around 3.6 million hours of instructional time primarily in grades 2 and 3 that we're concerned with. The other piece is at this late hour, I mean we have schools already in session now here in Wake County and over in Mecklinburg County, we've got schools back in session. We're talking about a policy decision that will take some of the resources that have already shown up for work out of the classroom. So we just need to have a discussion around that and then thirdly, the operational impact. The obligation for counties that comes from a higher pay increase than they have reserved for, because I think they were planning somewhere around the 5-6% range, best case for an average, that it could require them to have to go back and find several million dollars to fund their piece of the pay raises when they get to the local level. I think in Mecklinburg County's case, I think that it goes from about 7 million they've reserved for to about another 20 million they would need to meet the 11%. So call it 10 million if we meet halfway. But I think that's what we have to talk about. I think that your points on medicaid are spot on. We had a duly elected Democrat auditor tell Governor Perdue that they were wasting hundreds of millions of dollars a year on medicaid. I think that we do need to keep the pressure on, we need to do it in a way that's not disruptive, but I think we need to keep the pressure on to get to where that number needs to be. [SPEAKER CHANGES] Okay. Sen. Brown. Chairman Brown. [SPEAKER CHANGES] You know again, I think the House needs to make a legitimate offer. This was no new offer. This just moved a few numbers around it didn't make a new offer of any kind. Again, the Senate is prepared to negotiate this budget, you know there's a lot of options we've just kind of thrown out there for you to think about. You know we keep doing that, I don't hear that back. I haven't heard any offers back from the House on possible solutions to settle this. I keep throwing some ideas out there over and over, but I hear nothing back on the House side, nothing back from them on how we get there. So I think that it's important that the House understand that the Senate is just not going to take your proposal. I think it's going to be a compromise. And you've got to throw some proposals back at us to consider. And I just haven't heard any. And until that happens, I don't know how you move forward. Again, I have thrown different ideas out there on the

and I don't know what else I can do other than that but sooner or later the House has got to do the same before this process moves. [SPEAKER CHANGES] Thank you all for attending. This meeting is adjourned.