Commentary, NC Budget and Tax Center

NC’s overall uninsured rate masks stark differences across racial and ethnic groups

The COVID-19 pandemic has highlighted the long-standing inequities in our society, including disparate access to health care among different racial and ethnic groups in North Carolina. Last month, the Census Bureau released 2019 state-level data on health insurance coverage that inform our understanding of the gaps in health care coverage that existed prior to the pandemic.

The North Carolina uninsured rate remains higher than the national uninsured rate of 9 percent, a longstanding gap that has only widened since the state opted not to expand Medicaid — which would have lowered the uninsured rate — following the implementation of the Affordable Care Act’s major provisions in 2014.

The data show that while 11 percent of North Carolinians lacked health insurance, this figure masks the differences across racial and ethnic groups in the state. Except for Asian American and multiracial North Carolinians, the uninsured rate for all non-white racial and ethnic is greater than the state’s overall uninsured rate. The greatest difference can be seen in the 31 percent uninsured rate for Hispanic and Latinx North Carolinians, who represent approximately 10 percent the state’s population.

The uninsured rate for Hispanic and Latinx North Carolinians is substantially higher than both the state uninsured rate and the national uninsured rate for the same group. The high uninsured rate among this group prior to the pandemic, in addition to the essential work that many of them perform that increases risk of exposure, has likely played a role in the higher incidence of COVID-19, with 33 percent of the state’s cases occurring among Hispanic North Carolinians.

Immigrants, including those in the Hispanic and Latinx community, serve vital roles in the fabric of our communities, and yet in many ways have been systematically excluded or marginalized from state and federal actions prior to and in response to the COVID-19 pandemic, as we have written about elsewhere.

Suzy Khachaturyan is a policy analyst wit the N.C. Budget & Tax Center.

NC Budget and Tax Center

N.C. General Assembly has a half billion dollars to spend on COVID-19 relief; Congress needs to pass more for states

Earlier this month, the North Carolina General Assembly’s Fiscal Research Division released its analysis detailing the approximately $552 million remaining in the state’s share of the federal Coronavirus Relief Fund (CRF). The General Assembly is scheduled to return to Raleigh for a brief session beginning on Sept. 2, at which time they should put to use the remaining funds to address the urgent needs North Carolinians are facing.

The fiscal brief notes that, of the more than $3 billion that has been appropriated by the General Assembly thus far, $351.5 million of those appropriations are not currently allowable under federal guidance, meaning the funds cannot be spent until their intended use is permitted in subsequent guidance or an amendment to the federal legislation that appropriated the funds to the state. Despite

CRF dollars were appropriated to the state as part of the CARES Act passed by Congress in March in the third and largest federal COVID-19 relief package to date. Some localities, including the City of Charlotte and Guilford, Mecklenburg, and Wake counties, received direct aid as well, while smaller localities had to rely upon state appropriations. Since then, Congress has failed to come together to pass any meaningful relief for state and local governments or for individuals and families facing extreme hardship, which we’ve highlighted.

Last week, the U.S. Senate adjourned after putting forward a piecemeal relief plan that fell far short of what is needed in North Carolina and failing to take subsequent action. Prior to the adjournment, President Trump took executive action that experts say would not help people struggling to pay rent, puts public services at risk in a misguided attempt to extend unemployment insurance benefits, and would provide little to no economic boost through payroll tax deferrals.

Congress needs to pass comprehensive COVID-19 relief that targets aid to families in need and provides substantial support for state and local governments so that public services can be sustained and jobs can be protected. Meanwhile, the N.C. General Assembly needs act as quickly as possible to put to use the remaining dollars meant to meet the needs caused by COVID-19.

Suzy Khachaturyan is a Policy Analyst at the NC Budget & Tax Center, a project of the North Carolina Justice Center.

Commentary, COVID-19, NC Budget and Tax Center

Why the Republicans’ piecemeal relief plan won’t get the job done for NC

Image: AdobeStock

The Republican COVID-19 relief plan unveiled in Washington earlier this week fails to meet the needs of North Carolina families. Nor does it address our unprecedented state fiscal crisis, which means it will make the recession longer and more painful.

This crisis is bigger than any since the Great Depression, but the Republican’s piecemeal proposal falls well short of the breadth and depth of aid desperately needed across a range of issues.

New research released last week by the Center on Budget and Policy Priorities shows the number of people struggling to get enough to eat has increased dramatically and a huge number of people are falling behind on rent — just as the national moratorium on evictions has expired.

In North Carolina, one out of five renters – 422,000 people – are behind on their payments. Nearly 8% of the workforce is unemployed. And one in five adults living with children —522,000 — reported that their children were not eating enough because of the public health crisis and recession has cut into the family income.

Yet the proposal puts forth woefully inadequate solutions to these problems, despite the fact that the federal government is best positioned to provide bold solutions.

There is no increase in SNAP benefits to help people buy food for themselves and their families, no funding for homelessness services or additional rental vouchers, and substantially less money for laid-off workers, even though high numbers of COVID-19 cases could mean that many people are unlikely to return to work soon.

It also doesn’t include nearly enough aid to state and local governments to prevent layoffs of teachers and public workers and cuts to schools, Medicaid or critical public services. Revenue projections released by the General Assembly’s Fiscal Research Division predicted a loss of nearly 7% in the state fiscal year that ended in June and a nearly 10% loss in the current fiscal year.

With a state constitutional requirement to balance the budget, the reality of limited revenue jeopardizes the state’s investments in K-12 and higher education, public health, transportation and numerous other core structures and services.

And while tens of millions of people are facing serious financial hardship, Black, Latinx, Indigenous and immigrant people have been hit the hardest because of structural racism that creates disparities in education, employment, housing and health care.

For example, an estimated 301,000 North Carolinians were excluded from receiving stimulus checks because they live in a household where at least one family member files taxes using an Individual Tax Identification Number (ITIN) instead of a Social Security number. Nonetheless, the latest proposal by Senate Republicans backs additional stimulus checks while continuing to leave out this community that pays taxes and performs essential work we all depend on.

During the negotiations over a final package, Congress must prioritize support for people hard hit by the crisis. Lawmakers should do this by ensuring these people get the help they need and by working to prevent states, cities, and towns from making deep budget cuts that will hurt tens of millions.

It is imperative that Congress act immediately to negotiate a bipartisan agreement that provides a strong safety net:

  • Provides additional federal funding for Medicaid programs and direct grants to states to protect core public services such as education and transportation, in addition to aid for local governments;
  • Continues expanded unemployment benefits, while supporting businesses and the economy by providing people with a modest income during this challenging time;
  • Temporarily increases SNAP benefits and housing assistance;
  • Creates an emergency fund for states to help people who are falling through the cracks and to create subsidized jobs programs when workers can participate safely; and
  • Advances inclusive policies that acknowledge both the contributions of immigrants and the unique challenges many immigrants face through limited access to public benefits and COVID relief.

This unprecedented crisis, drawn out by poor leadership at the highest level, must be met with unprecedented federal policies that prioritize the needs of people. North Carolina’s U.S. Senators Tillis and Burr must put people first by calling on congressional leaders to do more and pass a better relief package, especially for state and local governments and low-income North Carolinians who have been hit the hardest by the pandemic and are facing the greatest financial hurdles.

Suzy Khachaturyan is a Policy Analyst at the NC Budget & Tax Center, a project of the North Carolina Justice Center.

Commentary, COVID-19, NC Budget and Tax Center

Federal funding is essential to saving North Carolina’s public services

[Click here to download a PDF version of this post.]

The COVID-19 pandemic and resulting recession are wreaking havoc on North Carolina. The state is facing a massive revenue shortfall that will significantly affect its budget and its ability to provide crucial services.

Federal funding is needed to help North Carolina, along with the local governments within it, in ensuring that health care, education, transportation, first responders and other services continue uninterrupted.

The picture is already bleak; since the pandemic started, the state has lost 61,500 public sector jobs. The economic gravity of the shortfall cannot be stressed enough; without further federal aid to state and local governments, North Carolina is projected to lose 156,500 private and public jobs by the end of 2021. The recent resurgence of the virus only compounds the urgency and should dispel all complacency.

The coronavirus pandemic has greatly harmed North Carolina’s economy:

  • In May, North Carolina had an unemployment rate of 9%, one of the highest rates ever recorded, with roughly 440,000 more state residents out of work compared to February.
  • As of early July, approximately 1,200,000 North Carolinians, representing 5 percent of the state’s February labor force, have filed unemployment insurance claims since the beginning of March. Some estimates are projecting a double-digit unemployment rate well into 2021.

North Carolina’s tax revenues are plummeting — creating a severe funding crisis for schools, health care, and other critical services. The North Carolina state government has projected a budget shortfall of $1.6 billion in FY 2020 and $2.6 billion in FY 2021, representing declines of 7% and 10% respectively.

Cities in North Carolina are facing serious revenue shortfalls as well. Charlotte alone has recently projected a budget shortfall of $22 million, according to local sources. The National League of Cities estimates that cities will experience $360 billion in revenue loss through fiscal year 2022, which will force them to significantly cut spending on crucial services or raise taxes on already recession-battered residents. Studies on the Great Recession have found that forcing states to deal with severe budget constraints through austerity dampens long-term gross domestic product (GDP), prolongs spells of high unemployment, and extends recessions.

Between February and May, 61,500 public sector workers were laid off in North Carolina.

  • The National Education Association has estimated that North Carolina could lose roughly 79,600 education jobs by the end of FY 2022 as a result of the decline in the state general revenues that fund education.

Absent federal action, these job losses could get much worse. A recent analysis conducted by the Economic Policy Institute estimates that without it, North Carolina will lose a combined total of 156,500 public and private jobs by the end of 2021.

Health care in North Carolina is also in jeopardy. The Urban Institute has projected that Medicaid caseloads could increase by as much as 363,000, or 25%, through FY 2021 — a massive and unprecedented spike. North Carolina desperately needs help to cover those who are newly unemployed and expected to enroll in Medicaid and offset extra Medicaid costs related to coronavirus. Without proper funding, the state will be unable to treat at-risk patients, keep families healthy, or provide lifesaving care. Funding Medicaid is critical to ensuring that North Carolina can respond effectively to the coronavirus public health crisis and the current economic recession.

The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act, which passed the House of Representatives on May 15 with bipartisan support, includes provisions that would help North Carolina avoid additional layoffs and devastating cuts to services. Specifically, it would: Read more

COVID-19, NC Budget and Tax Center

NC General Assembly allocated some federal dollars; more are available and urgently needed

Yesterday, Gov. Cooper signed into law the first two pieces of legislation agreed upon by state lawmakers following five days of committee and chamber meetings that were held virtually in Raleigh. Unfortunately, while this first step will address some of the urgent needs arising from the COVID-19 pandemic, it leaves most of the response work undone. As a result, lawmakers will need to move quickly to use billions of dollars in available federal and state funds to combat the immediate effects of the crisis and prepare for recovery work.

The package approved by the Governor yesterday spends $1.58 billion for fiscal relief for transportation, supports for nonprofits and hospitals in meeting the needs of the rural and marginalized communities, “non-transportation” state agencies and local governments, funding to support remote K-12 education, local government supports and more.

Read more