Commentary, COVID-19, NC Budget and Tax Center

The General Assembly’s COVID-19 bill: what you need to know

Lawmakers include some important elements in initial COVID-19 response, but glaring omissions leave need for lots of additional action to build a truly resilient and inclusive North Carolina

The House and Senate agreement on the first legislation to respond to COVID-19 is an important first step that signals the potential for policymaking in a way that we haven’t seen in the past year: an acknowledgement that leadership and service to the public must transcend politics and has a critical role to play in the protection of our collective well-being.

And yet, the scope and focus of the final legislation will fall far short of meeting the needs of the people across North Carolina who are struggling with job loss or working in unsafe conditions doing essential work, and with limited resources, caring for families and educating children.

The bill spends just $1.6 billion of the $3.6 billion provided in federal funds to the state via the Coronavirus Relief Fund. It will provide only minimal support to North Carolina’s public systems and local governments that are strained to respond to the need for health care, information and income supports.

A preliminary analysis of the final agreement approved Saturday morning suggests many important items will be missing; critical provisions from one chamber’s bill were omitted, even as modest progress was made primarily on first-order public health and economic impacts of the coronavirus. It is hard to imagine a justification for the General Assembly’s stinginess given documented needs, as these federal funds must be spent by Dec. 30, or forfeited back to the federal government.

The final provisions that in some way will protect public health and minimize economic harm include a higher amount of funding for small business supports, as was included in the Senate proposal. However, they will still likely fall short of the need and funding for testing, vaccine research and emergency health care coverage. Nor will these provisions fully cover the Division of Employment Security’s need to increase its ability deal with historic numbers of claims, to schools for nutrition programs and to local governments for COVID-19 related expenses.

Critical provisions that were in earlier versions are not in the final bill, however. Most notably, changes to the state’s unemployment insurance system that would increase the maximum benefit amount from the low $350 (which represents a third of average weekly wages) to $400 and changes to how weekly benefit levels are calculated included in the Senate proposal were left out of the final bill.

When more than 950,000 North Carolinians have claimed unemployment insurance benefits, North Carolina needs a system that adequately replaces lost wages and allows workers to cope should federal programs expire before the economic recovery is secured.

Additionally, in the face of a public health crisis and the loss of employer-provided health care, policymakers failed to advance a proposal to close the coverage gap so that North Carolinians could access affordable health care and ensure that people can get necessary treatment.

We know that expanding Medicaid isn’t just good policy for our state, it’s also is a key tool in meeting the immediate and disparate public health impacts of COVID-19. Absent Medicaid expansion, emergency health insurance coverage or increases in funding to hospitals to cover uncompensated care will fail to maximize federal funds and provide the health care people need over the long-term.

In education, several key investments were included that were omitted the Senate proposal, but at levels that will likely be inadequate to address the challenges faced by schools (see funding details here). A number of problematic provisions remain in the final bill, including limited flexibility for school districts to move funds to meet urgent needs, as well as a number of unfunded mandates that could hamper the delivery of education. Meanwhile, key stabilization funding for child care providers was missing Also missing was funding to ensure child care remains affordable for working parents and early childhood educators and can receive protections and hazard pay.

House and Senate leaders should immediately turn to work on the issues not addressed in this proposal. Their second package should adequately respond to communities’ needs in a way that reaches those most in harm’s way. It should build the necessary public systems for our communities to respond to public health and economic crises and serve the people of this state in need.

These missed opportunities include, along with those detailed above,

Notably too, legislators missed the opportunity to draw down more federal funding for elections and to protect state agencies and local governments from short-term revenue shortfalls, given current US Treasury guidance restrictions.

As legislators work to sustain their response to COVID-19 in the coming weeks, they should commit to a framework that focuses on well-being over bottom-lines, values caring and essential work, includes all people, builds resilient systems and supports public institutions. This requires not just relying on federal resources but also committing available state dollars to community priorities.

The General Assembly’s collective work — along with the Governor’s efforts — should ensure our recovery puts us on a higher road to prosperity — one that is shared and not just for the few.

That higher road to recovery will require systemic changes that have been put in relief during this pandemic and a commitment to meet public needs in the face of revenue shortfalls. These include but are not limited to:

  • People must be able to take time off from work to care for themselves or loved ones without fear of losing their job. North Carolina should ensure that those not covered by the federal program can access emergency paid sick days and paid leave.  In the long-term, North Carolina should create a paid leave insurance program at the state level to ensure similar protections.
  • Every child has a right to a sound, basic education. The Leandro recommendations and investments contained in WestEd report  provides a picture of the needed policy changes and public investments to meet the state’s constitutional obligations to North Carolina’s children; it should be the continued focus of the NC General Assembly.
  • Families in need should be connected to the supports and resources required to meet basic necessities and move out of poverty. Before the COVID-19 crisis, North Carolina’s poverty rate was 14%. Financial hardship affected a far greater number, including those who are living paycheck to paycheck. North Carolina needs to build an interconnected, efficient infrastructure that delivers income supports to those in need, connects families to services, and establishes policies, like an increase to the state minimum wage to at least $15 an hour, that helps people achieve financial stability.
  •  If valued and funded, public institutions and civil servants, our state’s public sector workforce, provide the foundation upon which our collective well-being can rest. North Carolina can’t afford not to invest in the public institutions, systems and infrastructure needed to efficiently and effectively support communities, families and businesses. As demand for public programs and services is likely to continue and could increase through this downturn, it is critical that state policymakers not further reduce investments in public institutions.  And in turn they should work to ensure federal aid is adequate and flexible to state and local governments.

The ways in which COVID-19 will continue to impact our daily lives, communities and economies may still be uncertain. But continuing the work to establish the policies and support the systems that will guide us through this difficult time should be the priority of legislators in the coming weeks.

With contributions from Suzy Khachaturyan, Public Policy Analyst of Budget & Tax Center, Kris Nordstrom, Senior Public Policy Analyst of the Education & Law Project, Nicole Dozier, Director of the Health Advocacy Project.

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