COVID-19, NC Budget and Tax Center

How does health funding fare in the legislature’s COVID-19 response packages?

Tomorrow, the state House and Senate are expected to come to a compromise on what will be their first piece of legislation in response to the COVID-19 crisis, exactly two months after North Carolina’s first case was detected on March 2.

While life has changed for all North Carolinians, some have been more exposed to the dangers posed by the coronavirus pandemic due to policy choices that have blocked people from accessing health care, depleted the public health infrastructure, weakened the social safety net, and diverted money away from communities.

These choices and others translate into health disparities that are putting some in greater danger due to COVID-19 because their limited employment opportunities put them at higher risk of exposure, they have chronic conditions that make them more susceptible to the severe impacts of the disease, and structural inequities make it less likely that they will receive the care they need. The result is that African Americans are disproportionately contracting and dying from COVID-19 in North Carolina. In other areas around the country, Latinx and American Indian populations are also dying at disproportionately high rates given their relative share of the population.

Now is the time to make the investments in public health infrastructure, supports for communities who have been blocked from accessing care, school nutrition, COVID-19 research, and supports for hospitals so they can continue to serve their communities. Here’s how the House and Senate proposals to date compare:

In addition to the funding, there are other key provisions that differ across the bills. Read more

Commentary, COVID-19, NC Budget and Tax Center

Maximizing federal dollars to meet urgent needs should be the first priority of state leaders

On Friday, Gov. Roy Cooper released his recommended coronavirus response budget, which would invest $1.43 billion through July 1, 2020. The budget proposes allocations for immediate public health and safety operations, education and state government services, and small businesses and local government assistance.

Prioritizing urgent necessities such as testing and other public health services is a crucial first step, but more should be done in the short term to meet the immediate needs of families and communities while also giving state agencies the assurance that they can build capacity and respond to increased public demands well beyond the three-month window proposed in this budget.

Our analysis of the first three pieces of federal legislation passed in response to the COVID-19 crisis suggests that at least $6.5 billion in relief funds have been allocated to North Carolina. To put this figure into perspective, if the state were to invest all of these dollars today, in addition to the piecemeal budgets enacted instead of a comprehensive budget, we still would only be spending at roughly the historic average as a share of the economy, despite the unprecedented economic shock to our communities.

That is to say, these federal dollars deployed for the increased needs of public health, workforce, housing, and education will barely scratch the surface in comparison to the scale of need that people and communities are facing during this pandemic.

Not all federal funds will be received in the state’s General Fund, the primary fund from which state appropriations are made. State agencies that directly receive federal funds should quickly and fully deploy these dollars to address those needs that they are expert at addressing and at the same time, they should provide the public with a way to understand the priorities and allocation formulas used to deploy those dollars.

Notably, the Coronavirus Relief Fund, the largest stream of federal funds thus far and the source from which the governor proposes appropriating dollars, cannot be used for one of the state’s pressing needs — the anticipated steep loss of revenue brought on by COVID-19 and the simultaneous economic crisis. That’s because this week, the U.S. Treasury released guidance for states that outlines the restrictions on allowable uses, including that the funds be used for necessary expenditures incurred “due to” the public health emergency resulting from the COVID-19 pandemic. These limits are another reason why we need a fourth federal relief package that includes flexible aid to state and local governments and an increase in the federal share of Medicaid costs. North Carolina needs more flexible federal aid to ensure that state leaders can access funds to address revenue losses without making cuts to critical public services and to ensure the state can sustain a crisis response beyond the next three months and for the duration of a full economic recovery.

After years of underinvestments and in light of the high demand for services, our state’s public infrastructure needs a rapid investment of dollars for supplies, technology, and – perhaps most importantly – administration. After all, people run our government.

Take the state’s Division of Employment Security (DES), for example. With over 700,000 state unemployment claims filed since the beginning of the crisis — up from about 2,600 claims per month during the period before the crisis – DES identified early on the need for more equipment, IT infrastructure, and staff and subsequently tripled its staff from 500 to 1,600. Still, many applicants are still waiting to receive their unemployment benefits or for their application to be processed due to the backlog.

Identifying needs and responding quickly by mobilizing dollars at the state and local levels will mean that more families will be able to make ends meet during this crisis by accessing the services and benefits they desperately need. North Carolina should maximize the federal dollars it receives and should prioritize smart investments that quickly put those dollars to use and strengthen the public infrastructure necessary to withstand this economic downturn and to rebuild our communities so they are more resilient for the future.

 Suzy Khachaturyan is a policy analyst at the N.C. Budget & Tax Center, a project of the North Carolina Justice Center.

Commentary, COVID-19, NC Budget and Tax Center

Shelter-at-home orders protect people; lifting them would invite a spike in COVID-19 cases, deaths

On Tuesday, hundreds of protesters gathered in Raleigh to protest the stay-at-home order, claiming that the mandated closure of many businesses was causing unnecessary harm to the economy. On the same day, it was declared that the virus is the leading cause of death in the nation.

Public health experts agree that physical distancing is the most effective tool we have to prevent the spread of COVID-19. When restrictions are eventually eased, it is nearly certain that there will be a spike in cases, so they must only be eased once a series of measures are in place, including widespread testing and contact tracing for positive cases, increased health care capacity including workforce and beds, ample personal protective equipment (PPE) including masks and ventilators, and ideally a safe and proven treatment or vaccine.

When COVID-19 cases began appearing in North Carolina in early March, data models predicted that the pandemic would peak in the state in late April. Since then, the updated state-wide models have shown that if physical distancing continues beyond April, the peak will shift to mid-to-late-May, evidence that physical distancing is working. The peak will continue to shift in this way until restrictions are eased. This is why it’s so important for us to “buy time” to ensure that every corner of our state and nation is fully prepared, because there will be more cases and more deaths.

COVID-19 has had a devastating effect on our state and nation in recent months, particularly among communities of color, which have experienced disproportionate rates of illness and death as a result of the virus. In addition, individuals and families are facing numerous challenges including unstable housing, food insecurity, interpersonal violence, anxiety and depression, and difficulty making ends meet. The hardships to individuals and families brought on by COVID-19 are real.

Despite these serious challenges, reopening businesses would only create more hardship. Read more

Commentary, NC Budget and Tax Center

The public’s health depends on a strong safety net

Image: AdobeStock

Times of crisis, like the public health and economic crises caused by the COVID-19 pandemic, bring out the strengths and weaknesses of people and societies. Some manage their fear and anxiety by stockpiling household items like toilet paper, while others gather virtually to identify needs in their neighborhoods and mobilize to deliver sustenance and supplies to medically high-risk neighbors.

Crises like this also magnify the strengths and weaknesses of the public policies and systems in place to deliver services and supports. What happens when non-essential businesses close and everyone is instructed to stay at home to stop the spread of the virus? People lose their jobs and the dominoes fall from there. Essential needs like shelter, food, electricity, and child care all become more difficult to meet.

For people to remain healthy and sheltered in place, they need to live in safe and affordable homes, have access to affordable health care and nutritious food, and have the means to otherwise support their families by paying for utilities, household essentials like cleaning supplies, and internet access so their children can continue learning. An equitable response to this crisis depends on a robust safety net that would allow all people—regardless of their economic status—the resources to shelter-in-place with their families.

Our communities are beginning to understand what public health practitioners have long understood: The ability for our communities to thrive is tied to the ways in which we promote health through our public investments. Less understood is the system for delivering those supports.

After the hardship of the Great Depression, many of our nation’s key social programs were born, including the widely used Social Security program, unemployment insurance, the Food Stamp program (now SNAP), public housing, and Aid to Families with Dependent Children, which guaranteed cash payments for dependent children in families with low incomes.

Since then, we have seen the proliferation of well-known and broadly supported programs like Medicare, Medicaid, Housing Choice Vouchers, Head Start, Supplemental Security Income (SSI), the Earned Income Tax Credit (EITC), and the Women, Infants and Children (WIC) nutrition program. These programs deliver essential goods and services to the tens of millions of families that qualify for them.

And yet, barriers to accessing these programs abound, ranging from weekly reporting to strict food allotments to the most baffling restriction – the requirement to report work hours in order to receive basic necessities such as food assistance and health care. Tying essential services to employment cannot be the way forward, and yet employer-sponsored health coverage is the source of coverage for the overwhelming majority of Americans with health insurance, and has recently resulted in thousands becoming uninsured in addition to unemployed.

Housing, health, food, basic incomes – these are all rudimentary rights, but we have created public policies that make it impossible for families to stay connected to these basics. Take, for example, the problem of the low stock of staple foods at grocery stores due to panic purchasing. Current restrictions on food purchases are so strict under some assistance programs that nutritionally at-risk and medically vulnerable pregnant women and children under 5 are more likely to leave a store empty-handed than they are for the program to bend enough to fit the current reality and help them get nutritious food in their bellies.

It is vital that our communities stay healthy and safe, not only during crises. This means ensuring that everyone can access the supports they need for their families to grow and thrive long after the COVID-19 pandemic has passed. It shouldn’t take a crisis for us to recognize how truly interconnected we all are to each other, and that our safety and health are inextricably linked to the safety and health of our neighbors.

COVID-19, NC Budget and Tax Center, public health

State and federal policy responses to the COVID-19 virus

This blog post will be regularly updated to capture key policy responses to the COVID-19 virus. (Last updated 1:45 p.m. Tuesday, March 24)

Reports from Budget & Tax Center Staff

This post summarizes steps taken thus far at both the federal and state levels. Scroll down to see a list of steps taken so far, or click on the following links to bring you directly to a specific section:

COVID-19 provides a sobering reminder of how much we need effective and well-resourced governance at the state and federal levels. Particularly in times of crisis, we need an infrastructure that delivers a coordinated, seamless response and reaches each and every person in the community.

The coming months will test federal and state leaders’ ability to blunt the impacts of this global pandemic and contain the harm to the health, well-being, and economic security of people.

Decades of tax cuts have left us vulnerable to a moment like this. Conservative leaders in Raleigh and Washington have given huge tax breaks to rich people and multinational corporations instead of building the systems we need to respond with a coordinated and collective set of programs.

Years of policies that attacked the very institutions that are so critical now have made the response more fragmented and challenged.  Our public health agencies are under-resourced for the growing complexities and services needed in the face of this new coronavirus pandemic coming on top of a very bad flu season. Our public schools haven’t received adequate resources to provide classroom materials and technology in school, let alone outside of it, and many school personnel are worried about their ability to make ends meet in this time. Indeed, many workers will struggle to make ends meet if their hours are scaled back, they get sick, or they lose their jobs because our policy choices have failed to provide access to affordable health care, paid sick days, and a strengthened unemployment system.

COVID-19 is likely going to have an even broader economic impact going forward and could push the United States into a full-blown recession.  Strengthening our programs that can automatically stabilize the economy by helping people make ends meet is critical, as will be aid for states to maintain balanced budgets without dramatic cuts to programs and services needed now.

In short, North Carolina will need a robust policy response at the state and federal level.

Read more