Cooper proposes asking voters to approve $4.7 billion for school and state building projects.

Gov. Roy Cooper has again proposed that voters approve borrowing money for statewide construction and renovation projects.

But the idea of borrowing, no matter who comes up with it, has proven to be hard to get legislative approval recently. Senate Republicans prefer paying for buildings with direct appropriations.

As part of his budget this year, Cooper has proposed putting a $4.7 billion bond to a vote in November.

-$2.5 billion would go to K-12 school construction.  A report from the State Board of Education and the  Department of Public Instruction based on a 2015-16 survey found school districts needed $8 billion for buildings, additions, renovations, and other capital costs.

-$500 million would go to community colleges

-$783 million would go to UNC campuses. The largest project is a new Brody School of Medicine building at East Carolina University, at $187 million.

The recommendation includes money for renovations at two of the state’s development centers and two of its neuro-medical centers, the state alcohol and drug treatment center in Black Mountain, and money to expand TROSA, a residential addiction treatment center based in Durham, to the Triad.

The bond recommendation includes $229 million to move the state Department of Health and Human Services from the Dorothea Dix campus in Raleigh to Blue Ridge Road.

Assorted state attractions would get a total of $460 million, including $70 million for NC Zoo exhibits.

Cooper included a $3.9 billion general obligation bond as part of his 2019-20 recommended budget that the legislature did not consider.

The state House has been amenable to the idea of asking voters to approve borrowing for capital projects. In the last two years, House Republicans have put together their own bond proposals, and passed them with little opposition.

In 2019, House Speaker Tim Moore cosponsored a $1.9 billion school construction bond bill that moved swiftly through the House and died in the Senate.

approval.

The House tried again last year, passing a $3.1 billion bond bill with the money to go to school construction and transportation projects. That bill also died in the Senate.

Gov. Roy Cooper’s budget puts Medicaid expansion back “on the table”

The proposed budget Gov. Roy Cooper released last week included his long-time priority, Medicaid expansion for 500,000 North Carolinians without health insurance.

The standoff over Medicaid expansion between Cooper and the Republican-led legislature contributed to Cooper vetoing the state budget in 2019.

Cooper said at a news conference last week that he would not veto a budget over one issue, but he would not sign a budget that was “not right for North Carolina.”

“Getting more health care coverage to people in North Carolina is certainly a priority,” he said. “Medicaid expansion is the best way to do that. Everything is on the table this budget session. I’ve agreed with the legislative budget leaders that we want to put everything on the table. We hope that each side gets what it wants – that we work together to reach a budget I can sign.”

Medicaid expansion offers health insurance to adults who earn up to 138% of the federal poverty level. North Carolina is one of a dozen states that has not adopted Medicaid expansion, according to the Kaiser Family Foundation.

Republicans who control the state legislature have opposed expansion since it was first adopted as part of the Affordable Care Act, back when Bev Perdue held the governorship.

Republicans have offered various reasons over the years for opposing expansion – that Medicaid was “broken,” that expansion would cost the state too much, and later, that they did not want to expand the Medicaid population while the state was shifting from fee-for-service to Medicaid managed care.

The federal government picks up 90% of the costs for people who get Medicaid coverage under state expansions. Most of those who covered under expansion are low-income, childless adults.

Senate Republicans said they did not like an expansion-like plan that House Republicans devised that would have had hospitals pick up costs the federal government did not pay. That bill never made it out of the House.

The most recent federal COVID-19 relief package includes financial incentives for states that have not yet expanded Medicaid.

The Kaiser Family Foundation estimated that North Carolina would net $1.2 billion if it expands Medicaid.

Senate leader Phil Berger, an expansion opponent, told the Associated Press earlier this month that the extra money is time limited, and that coverage gaps could be addressed without “creating a whole new level of entitlement in the state of North Carolina.”

Cooper late last year created the bipartisan NC Council for Health Care Coverage to come up with ways to get coverage to more people. The Council developed a set of guiding principles, but did not settle on one strategy.

So far, Republicans have proposed bills with limited reach, such as the proposal to allow parents on Medicaid whose children are temporarily taken into foster care to keep their coverage.

In a Facebook post last week, Sen. Kevin Corbin, a Macon County Republican, said he was working on a bill with Sen. Jim Burgin, a Harnett Republican, that looks at expanding health coverage for working families.

Four important takeaways from the Governor’s budget proposal

Last week, Gov. Cooper released his recommended budget on the use of funds in the state’s primary bank account, the General Fund. In his first comprehensive plan for the state since 2019, the Governor would plan would shift the course of North Carolina’s spending trends, increase investments modestly in state infrastructure, and implement common sense policy changes that help families secure the health and well-being that supports strong communities and economies. 

Notably, the governor’s proposed plan for the state does not include funds passed as part of the federal American Rescue Plan, which includes approximately $5.3 billion for the state to address COVID-related needs, an estimated $1.3 billion for child care, and additional dollars to address the rising costs of the pandemic and the economic downturn.

The governor’s budget makes no effort to raise revenue; however, it does provide bottom-up tax credits targeted at North Carolina families who face the greatest harm from our state’s upside-down tax code and who have been hit hard by the pandemic’s employment and income impacts.

Here are four key takeaways:

1. The plan proposes a modest increase in spending across the state budget.

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Governor’s budget proposal is a cautious step toward rebuilding NC

The Governor’s budget proposal is a cautious next step as North Carolina begins the serious work of not just responding to this pandemic and downturn, but rebuilding afterward as well.

By focusing on people’s well-being now in several critical areas — boosting income, supporting access to health care, and committing to investments in public institutions — it demonstrates the potential of state dollars to support a more equitable recovery.

And it makes clear that current state dollars alone won’t get us to the North Carolina we could be. Federal dollars available from the American Rescue Plan are urgently needed to meet the scale of hardship and priority investments — but so is a long-term plan for our state to align our tax code to support the common good.

By passing on popular options to raise the tax rates paid by high-income taxpayers and profitable corporations, it misses a critical moment for getting NC on a sustainable path to more equitable outcomes. After a devastating year on top of a devastating decade, the harm to people, businesses, and communities of starving our public institutions of the resources they need to respond, innovate, and deliver is clear.

What the Governor’s budget does do on tax cuts is an important contrast to the proposals that have been introduced just this week by legislative leaders that would advance tax cuts for big companies and poorly targeted income tax cuts. The Governor’s budget would provide tax breaks for people who are struggling with income that isn’t keeping up with the cost of living, recognizing that the well-being of working families earning low wages can fuel a stronger recovery.

Governor Cooper proposed a series of bottom-up tax cuts for working families that will effectively drive support to those most hurt by the pandemic, who are currently being bypassed in a recovery that has already reached very high-income North Carolinians.

A state Earned Income Tax Credit will reach more than 850,000 families, primarily with children, and boost the value of the federal credit to ensure that the earned income in households is available to meet basic needs and support children’s healthy development. Read more