Teacher Raises, Expanded Medicaid, and School Funding on Gov. Cooper’s Budget Wish List

Gov. Roy Cooper speaks in March at a COVID-19 media briefing. Cooper is allowing the state's school mask mandate to expire at the end of the month, leaving the decision on masks to local school leaders. (Image via NCDPS)

By Sarah Ovaska

March 24, 2021

The governor hopes Republicans in the NC General Assembly will back his plans to expand health care coverage and more.

Gov. Roy Cooper on Wednesday released his budget recommendations, essentially his wish list for state spending, signalling that among his priorities is another push to extend health care coverage to those who need it.  

North Carolina creates a budget every two years, and Cooper’s proposals allot $55.9 billion over two years. The plan includes expanded health care coverage (Medicaid expansion) for lower-income adults, pay increases for teachers and state employees, and support from the state’s voters to borrow money to rebuild and invest in public schools, colleges and government buildings. 

Cooper said he hopes the Republican-led state legislature is willing to come to the negotiating table this year, something that didn’t happen in his first term. 

“We’ll put this pandemic behind us sooner rather than later,” Cooper said in a news conference announcing the proposal on Wednesday. “With the right investments, we can ensure our state roars back, creating opportunity for all of our people, not just those at the top. This is the time to find opportunity in crisis.” 

READ MORE: NC Mother Talks About Living in the Coverage Gap

The governor also said he wanted to see a bond on the ballot in the November election, to repair and rebuild public school, university, community college and state properties in need of repair or updates. 

He’d like to see a $4.7 billion bond go before voters, which he thinks would allow the state to make some much needed investments in buildings depending on schoolchildren and the public. 

The immediate response form the legislative wasn’t blind acceptance of Cooper’s proposal, but nor was it a flat-out rejection.  

“While there are a number of shared priorities funded in the Governor’s budget proposal, North Carolina lawmakers will remain vigilant in our responsible financial management of the state and avoid irresponsible decisions that have harmed taxpayers in the past,” NC House Speaker Tim Moore, a Cleveland County Republican, said in a statement. “The General Assembly will maintain budget strategies that made our state attractive to so many newcomers with a powerful economy and state government that serves citizens effectively.”

The Budget Process

 Every two years, the governor presents a budget of his own with his spending priorities. Then, Republican-led House and Senate legislature leaders will come up with their versions in the coming weeks, and negotiations (usually heated) begin. 

Cooper, a Democrat, was at odds with the Republcian-led legislature during the last budget negotiations, vetoing the  budget the General Assembly passed in 2019 because it didn’t expand Medicaid, a move that would have used largely federal funds to offer health coverage to more than 600,000 struggling North Carolinians. 

Cooper’s hopeful that state Republicans will support some version of expansion this time, a move with significant support among voters across party lines. 

Cooper told reporters Wednesday that he was open to negotiations, and that things have been much more cordial now that he, and Republicans in the legislature, were re-elected last year. 

“I’ve had numerous conversations with both Republican and Democratic leadership,” said Cooper, a Democrat. “And one thing we agreed on is that, first the people of North Carolina elected us again. So we’re back in the same situation that we were, and we should do the best that we can to find a path forward.” 

Hope for Medicaid Expansion? 

A few other things have changed as well.

First, the pandemic laid bare how crucial health care access is in the state as and thousands of people lost jobs and  their employer-provided healthcare. Then, President Joe Biden and Congress, in the latest COVID stimulus bill, offered a sweet deal to the states resistant to Medicaid expansion  — a boost of $1.7 billion over two years for NC’s share of the existing Medicaid program, which helps vulnerable seniors, children and those with disabilities. 

Finally, the Medicaid system is about to undergo a big restructuring, which had been a priority for Republican state lawmakers. Instead of the state running Medicaid, essentially writing checks to doctors and hospitals for every procedure, it is going to use managed care companies to handle people’s entire health needs. The thought is this more privatized approach will allow the state to keep its share of spending in check.  (Medicaid is paid by state and federal dollars, about $1 from North Carolina for every $2 of federal money.) 

Those three factors, Cooper said, may be enough for him and his one time political opponents to find some common ground. 

He’s also hoping to cut state taxes some, given that the state has weathered the rocky economy brought on by the pandemic relatively well. 

Cooper wants to bring back the Earned Income Tax Credit, a program halted in 2014 where some of the lowest-income North Carolains were given credits on their taxes. Cooper’s office estimated that reinstating the program would help 880,000 families earning less than $50,000 a year. 

He acknowledged that the legislature was more in favor of across-the-board cuts, or corporate tax cuts. That’s where negotiations can happen. 

“We would rather help people who are on the margins and the middle class,” Cooper said. “But when we think about the fact that we want investments in education, that we want people covered with health care coverage, all of it is going to be negotiated.” 

Here’s some other budget proposal highlights: 

  • Medicaid expansion, which would use largely federal dollars to extend health care to 600,000 North Carolinians
  • More funding for pre-K and early learning programs 
  • Reinstatement of the Earned Income Tax Credit, where families making under $50,000 would get a break on their state taxes
  • Help with childcare for many families with children, estimated to be about $400 for each eligible family
  • Raises of 10% over two years for K-12 teachers
  • Guarantees of at least $15 an hour wages for other school personnel 
  • Funding of programs to recruit and retain educators from diverse backgrounds 
  • Pay raises of 2.5% each year for most state employees, and higher raises for university and community college employees
  • Investments in parks and to shore up the state’s ability to withstand flooding 
  • Pay increases in what the state pays defense attorneys assigned to low-income clients in criminal cases 
  • Additional position in the state’s Innocence Inquiry Commission, who investigate wrongful convictions in North Carolina 


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