Commentary, NC Budget and Tax Center

Twelve good ideas for the General Assembly to move forward on now

This week was the filing deadline for legislative proposals at the General Assembly. While it isn’t the last opportunity for legislators to introduce policy ideas for consideration, it presents an important milestone in the session and a crucial time to review the priorities of policymakers.

The work of the General Assembly will be critical to address the public health threat of the COVID-19 pandemic and its ripple effects through the economy. There remain many gaps in the response from federal and state policymakers and the result is persistently high needs for families and communities across North Carolina.

The following are a dozen legislative proposals that would support the well-being of our neighbors and secure a stronger recovery for our state.

  1. House Bill 1229 (Howard, Wray, Saine) would provide funding for the unemployment insurance system, which has been overwhelmed by a historic number claims and pays out only half of those claims to individuals. It would also extend a temporary waiver on the time limit on food assistance. House Bill 1075 (Alston, Batch, Holley, Hunt) and Senate Bill 792 (Nickel, Chaudhuri) would also make important fixes to the system to protect workers and the economy when federal programs expire at the end of July.
  2. House Bill 1120 and Senate Bill 778 (Murdock, Smith, Foushee) would expand anti-hunger programming on college campuses  and provide funding to UNC institutions for this purpose. With college students excluded from federal food assistance and often facing higher rates of food insecurity, this program makes sense anytime, but particularly when hardship is likely to persist. Senate Bill 849 (Petersen), another important anti-hunger proposal, would remove the ban on food assistance for certain people with drug felonies and would support their successful re-entry from prisons and jails to society.
  3. House Bill 1040 (Batch, Brewer, Clark, Gailliard) and Senate Bill 834 (Robinson, Foushee, Blue) would close the Medicaid coverage gap. It would ensure that people who have lost health insurance during COVID-19, as well as those who were blocked from accessing Medicaid before the virus hit, can receive affordable care. In addition to creating a healthier, stronger community, researchers estimate the state would increase its business activity by $11.7 billion in just three years between 2020-2022 which could be spent on education, infrastructure and other needs.
  4. A series of bills would make important steps in addressing the state’s affordable housing challenge, including the unique pressures on renters and homeowners whose income has been disrupted by COVID-19. House Bill 1134 (Autry, Holley, Harris, Butler) and House Bill 1135 (Autry, Holley, Harrison, Butler) would provide rental and foreclosure assistance, respectively, while House Bill 1200 (Szoka, Saine, Baker, P. Jones) would do the same. House Bill 1208 (Lambeth) would put more dollars towards the state’s Workforce Housing Loan Program, supporting the development of more affordable units across the state. Read more
Commentary, NC Budget and Tax Center

First look at NC’s potential revenue losses from pandemic points to an obvious policy course

Image: AdobeStock

The consensus revenue forecast released by the General Assembly today provides further evidence of both the enormous economic harm COVID-19 is inflicting on the state and some important long-term certainties about our economy. More than ever, it’s clear that how people are faring and what policy decisions are made to support their well-being will make a difference for the state’s economic recovery.

Economists with the Fiscal Research Division and Office of State Budget and Management are cautiously projecting revenue losses as deep as the Great Recession, but they also lift up many questions that remain about how this downturn and the recovery will play out. They also make clear that the numbers reflected in today’s forecast could change.

One thing we know for certain, however, is that our leaders in Washington and Raleigh can and should put policies in place today to support people and thereby, in turn, our economy.

Only through a bold policy agenda that rejects the status quo can our state hope to bend this latest curve upward so that we can secure an inclusive recovery and ensure all communities can thrive.

The hard truth is that weaknesses of our last economic expansion left our state less resilient in the face of this pandemic. Too many North Carolinians were already living paycheck to paycheck; too many didn’t have access to affordable health insurance; too many couldn’t afford safe housing or afford to put food on the table each night. Too many barriers to good jobs and the capital to start new businesses persisted for Black and brown North Carolinians.

Our leaders must go further to provide people with the supports to make it through this pandemic. A pro-growth agenda can’t ignore the drag of inequities and hardship any longer, but must first invest in every person’s well-being.

Even with the projected revenue losses, North Carolina leaders can make smart choices to quicken the recovery for more people.

Now is the time for our state leaders to call for additional federal aid to state and local governments that is sufficient and flexible to fill this revenue shortfall. Now is the time to look to smart, targeted revenue options at the state level that can undo tax cuts that have hampered our public response.

In this moment and for the future, North Carolina must have the foundation of public services and institutions in place to deliver well-being to all.

Alexandra Sirota is the Director of the N.C. Budget & Tax Center.

Commentary, NC Budget and Tax Center

COVID-19 damage will worsen and linger without quick, robust policies from state leaders

The speed and strength of our economic recovery from COVID-19 will depend on the timeliness and inclusivity of our state’s policy response.

If we wait to deploy dollars and connect more people and businesses to the necessary supports for health, housing, and income, North Carolina’s recovery will take longer. It will also result in costly long-term damage to the wealth, stability, and health of our neighbors. As researchers at the New York Fed have found the importance of timely and adequate early policy interventions during a public health crisis can make a significant difference in the trajectory of a community’s  recovery.

Already, the Congressional Budget Office is projecting that unemployment rates will remain as high in 2021 as they were during the highest points in the Great Recession — 10%.

Nationally, the scope of need is staggering and unlike any economic event in modern history.

Yesterday, 100 county snapshots for North Carolina were released to show the barriers that persisted through the last economic expansion for too many communities and people in our state. This data — along with emerging measures of need in light of COVID-19 — should signal the urgency of a robust response that seeks to secure recovery for everyone and all communities.

It’s worth repeating: Quick deployment of dollars and policies to minimize the harm to people will strengthen the state’s recovery and ensure that the new rules of the game better support our collective well-being.

The needs are stark and make clear the wide-reaching effects of the virus on every person. For example, there have been nearly 15,000 confirmed cases of COVID-19 and more than 500 deaths in North Carolina since the start of the pandemic, adding to the already high numbers of people without health insurance.

With reopening underway and people returning to their jobs, too many workers are at greater risk for infection because protections are not in place. Personal protective equipment is available at varying levels, with just 31 days’ worth of supply for N95 masks and no gowns.

And since our last economic expansion kept too many people living paycheck to paycheck, many families are struggling even more now to meet basic needs. Food and housing insecurity were already high before COVID-19, and evidence of missed meals and missed rent payments is mounting. Read more

Commentary, NC Budget and Tax Center

Failure of NC relief package to adequately fund early childhood education was a big mistake

For years North Carolina legislators on both sides of the aisle, business leaders, and early childhood advocates have emphasized the powerful role that quality, affordable preschool education plays in supporting healthy development, family stability, and community economic well-being.

Yet, too often, the rhetoric has not translated into the investment necessary to build an early childhood education system that supports children, families and educators.

The first legislative response to the COVID-19 pandemic provides another example of this problem. Rather than tap into available federal Coronavirus Relief Funds to fully support early childhood education, North Carolina legislators allocated federal funds only from the Child Care and Development Block Grant, which limited their reach and fell short of addressing the need.

The first legislative package provides $166 million to child care and child care response (an initiative to help families frontline workers) from federal funds dedicated to this purpose. But only an additional fraction of a $19 million line item for multiple services providers will likely be allocated in the child-care response.

This figure is unlikely to sustain even the existing commitments by the Department of Health and Human Services — important efforts to provide hazard pay and support to families — through Phase 3 of reopening the state. This amount is insufficient to meet the full need for investments in health and sanitation measures, and for stabilization grants and small business supports to child care providers whose reopening is critical to ensuring access to early childhood education in many communities.

One third of child-care centers in North Carolina have reported that it will be difficult for them to reopen — even when it is safe to do so — without public support. Closures of child care providers risk increasing the state’s already real limits on access to early childhood programs. Estimates suggest that 144,000 child-care slots are at risk in North Carolina alone.

Even as another federal boost to child care funding is being considered, the North Carolina General Assembly should commit available federal and state funds at a higher level to the explicit purpose of strengthening the early education system in the state. After all, our state’s early childhood system will be essential to the strength of our economic recovery.

The failure to invest doesn’t just jeopardize the health and safety of early childhood educators, particularly in the near-term, as Phase 1 of reopening will immediately affect child care centers. It also puts at risk the quality and accessibility of our state’s nationally recognized early childhood system and the ability for the state to secure a strong recovery that supports the resiliency of families and communities.

North Carolina’s second legislative package to address the COVID-19 outbreak must begin to recognize that our early childhood system’s successful recovery requires focusing on the fact that those who care for our youngest children earn some of the lowest wages and must often make do without health care insurance or paid sick days.

It should be clear now that we cannot revert to an early education system built on parent-paid tuition and low wages and benefits for early childhood educators.

It also should be a priority to stabilize high quality child care centers and family-home centers that are operating in child care deserts and serving families with financial need. These providers should be supported with grants that allow them to stay in business as children slowly return to child care and as the economic recovery takes hold.

But our legislators shouldn’t be content to merely patch the holes through the initial crisis; they should embrace solutions that strengthen the system for the long-term. That means envisioning an early childhood system that delivers services and commits public funding to maintain an infrastructure of early childhood education in every community that is accessible to all children, regardless of their family’s income.

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, Read more