How North Carolina’s Budget Impacts Rural Communities

Rural Western North Carolina. Photo Credit: Dylan Rhoney

By Dylan Rhoney

September 28, 2023

For rural NC, the budget has a boost in Medicaid expansion, and another round of pain for public education.

The North Carolina General Assembly finally passed a state budget last week, after months of delays. The budget will have a substantial impact on rural North Carolina, with the biggest impact likely coming from Medicaid expansion. 

With the passage of the budget, North Carolina joins 39 other states and Washington, D.C. in expanding Medicaid to more low-income residents as part of the Affordable Care Act’s opt-in expansion program. It is estimated that around 600,000 North Carolinians will be eligible to enroll in the expansion when it launches on December 1st.

Department of Health and Human Services Secretary Kody Kinsley said that Medicaid expansion will provide the greatest benefit to the state’s rural regions. 

“Rural communities in North Carolina, individuals that live there, are three to four times more likely to be uninsured than in our urban spaces,” Kinsley said.

This will not only provide needed healthcare services to residents, but also benefit healthcare providers in rural communities who will be treating patients with health insurance to pay for those services.

Potential Benefit for Eastern North Carolina

State Rep. Shelly Willingham, who represents Edgecombe, Martin, and Bertie Counties in the North Carolina House of Representatives, was one of only five House Democrats who voted for the budget. He said the inclusion of expansion was a deciding factor.

“I was going to vote for anything that would push Medicaid expansion across the line,” he told Cardinal & Pine.

Willingham believes that if Medicaid expansion didn’t pass as part of this budget, it never would have. 

“If we had not got Medicaid expansion this time, we would never have gotten it,” he said. “I really believe if it was kicked down the road, we would never get it. There were a number of Republicans who didn’t want Medicaid expansion.”

The budget could also deliver another key benefit to Willingham’s district by potentially saving Martin General Hospital in Williamston. The hospital announced on August 3rd that it would stop receiving patients, but there is hope that funds provided to the county via the budget could save the hospital.

“I’m cautiously optimistic that we will be able to open the hospital again,” Willingham said.

North Carolina as a whole has seen pressure placed on rural hospitals in recent decades. Since 2005, 11 rural hospitals have closed down, and a 2020 study found that almost a third of the state’s rural hospitals were at risk of closing. 

Secretary Kinsley said the expansion will provide relief to those at-risk hospitals. 

“We’ve seen in states that have expanded Medicaid that rural hospitals close more slowly, and they’re stabilized more by people being able to have a way to pay when they walk in the door. That changes the financial aspects of that hospital’s operation.”

A 2018 study using nearly a decade’s worth of data found that hospitals in Medicaid expansion states were 84% less likely to close than facilities in non-expansion states.

Edgecombe County, which is also in Willingham’s district, also stands to gain from the budget. The largely rural county will receive $14.2 million in revenue from the state to put towards local priorities.

Edgecombe County currently has the ‘largest, shovel-ready mega-site’ in North Carolina. Located on just under 1,500 acres of land, the Kingsboro Megasite has the potential to bring thousands of jobs to the area. Earlier this year it was reported that about half-a-dozen companies were considering bringing operations to the industrial business park when it opens. Willingham says without funding from the state, the county would not be able to support this project on its own.

“In Edgecombe County we have the number one mega-site in the state. We’re on the verge of doing something big,” he said.  “[But] as a county, we don’t have the kind of resources to make that work.”

Help for Canton

Canton, the small mill town in western North Carolina, saw the Pactiv Evergreen paper mill close in May after over 100 years in operation, causing the loss of around 1100 jobs that threatens the local economy. 

The state budget allocates $42 million to the town, which Mayor Zeb Smathers said will greatly benefit Canton and will allow local leaders to take care of pressing needs in light of the mill closure.

“Thirty-eight million dollars has to go to the design and construction of a new wastewater treatment plant.”

Building a new wastewater treatment plant is critical for the town, as the current treatment plant is on site of the former mill that is owned by Pactiv Evergreen. With the money set aside for the building of the treatment plant, the town still has an additional $4 million to relieve some of the economic pain felt from the mill closure.

”It was a very good budget for the people of Canton and Haywood County,” Smathers said.

He praised the Haywood County delegation of State Rep. Mark Pless, and State Senators Ralph Hise and Kevin Corbin, as well as legislative leadership, for getting these funds to Canton. 

“You have to have buy-in from a lot of people. I feel that we’ve had support from across the state, Democrats and Republicans, so I think there was a bipartisan push to do good by the citizens of Canton, and the budget delivered,” Smathers said.

Budget Falls Short on Education in Rural NC

While the state budget will provide billions of dollars to rural communities across North Carolina, there is a sense among some lawmakers that it failed the state’s public schools, which are the lifeline of many of those communities.

State Rep. Eric Ager of Buncombe County says the budget simply didn’t deliver on education. 

“In most of rural North Carolina, the biggest employers in the county are the public schools, and people love their public schools,” Ager said. “While there were nominally 7% raises over two years, most of it goes to first and second year teachers. So folks that have been working in those schools for a long time aren’t going to see much of an increase at all.” 

Ager believes this lack of investment in the state’s schools will have a ripple effect in communities for years to come.

“If you look at the long arc, North Carolina made some really significant investments in its public school system when Terry Sanford and Jim Hunt were the governors, and the legislature really did invest in those public schools,” he continued. “What that resulted in is what we crow about all the time in Raleigh these days, being the best state in the country for business, and that was built on that investment.”

Ager says that while those past investments are now paying off in the present, the lack of adequate investments today could become more noticeable in the coming years.

“If we don’t continue to invest, then inevitably we’re going to fall off and not be there in 10 and 20 years,” he concluded.

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