Billions of dollars at stake as lawmakers and Gov. Cooper consider education, healthcare, unemployment relief.
Legislators are convening online and in Raleigh this week to decide how and when to spend the first $2 billion of $4 billion in federal relief funding for North Carolina.
Last week, Gov. Roy Cooper unveiled a $1.4 billion proposal, nearly half of which would bolster schools and state government operations. And a set of COVID-19 working committees in the NC House of Representatives tallied requests of at least $1.7 billion, closer to the full amount of the first wave of federal CARES Act funding.
Both dollar figures represent sprawling needs from healthcare and nutrition to transportation, online learning and small business aid. The difference reflects uncertainty about how the pandemic will continue to impact the state’s financial picture into the future.
“We’ve been told that the Senate wants to spend significantly less,” said Rep. Ashton Wheeler Clemmons, D-Guilford, a House Finance Committee member and co-chair of the COVID-19 education working group. “We can be fiscally responsible with our immediate needs, and we can meet the need to be saving still.”
In a letter to Cooper last week, GOP leaders asked Cooper to cut about $250 million, or 1%, from the state’s current budget. And that only represents about 10% of a $2.5 billion overall state revenue shortfall being projected by June 2021. On the other hand, the state still has about $7 billion in surplus savings, including $3.7 million in its unemployment trust fund.
Although the General Assembly cut funding for programs like Medicaid, unemployment and the university system in the last decade, the demand for public spending in the midst of this health crisis is enormous.
“We’re going to be chewing up a lot of surplus,” said Rep. Craig Horn, R-Union, another co-chair of the education work group. “That’s a scary thing. We’re predicting a very active hurricane season.”
House and Senate working groups are looking to a potential vote on their coronavirus plans Thursday.
“The challenges are just immense,” said Horn. “It’s overwhelming, but we’ve got to face every single one of them. The problem is you can’t face them one at a time. You have to face them all at the same time, and you’ve got to figure it out yesterday.”
“How we invest and spend to combat the COVID-19 crisis is the most important work right now,” said House Democratic Leader Darren Jackson, who co-chairs the House working group on state government operations. “The Senate GOP leadership is being very secretive, and I am very concerned they will not support the investments we need to address this crisis.”
There is a significant gap, almost $200 million, between Cooper’s plan and those requests discussed by the House working groups. A Department of Public Instruction survey found 300,000 North Carolina students without devices for online learning, and DPI is asking for $91 million to purchase new Google Chromebooks with 4-year warranties to provide to those students.
DPI’s total request is nearly $380 million, with $150 million pegged for new digital learning needs brought on by COVID-19, including the laptops.
“We tried to respond to the policy issues that were being brought to us by the educators,” said Clemmons, another finance committee member. “I hope that we honor that the federal resources that are coming through our state are to meet the immediate needs of the people in our state.”
Horn acknowledged that online learning has forced teachers to learn new ways of doing their jobs. At the same time, he expressed frustration that one of 2019’s big sticking points – teacher pay raises – has resurfaced.
“I want to laugh in their face, and I don’t say that lightly,” said Horn. “Don’t get me wrong. I support a pay raise for teachers. But right now, the house is burning down, and we’ve got millions of people out of work.”
The education working group alone received funding requests topping half a billion dollars from the public schools, community colleges, the UNC system and private colleges and universities.
Cooper’s proposal includes about two-thirds of that total, or $320 million for education, plus another $300 million for highway projects left unfunded because the state is losing tens of millions of dollars a month in gas tax revenue under the current stay-at-home order.
Unemployment & Health Insurance
With more than 700,000 North Carolinians having filed for unemployment since mid-March, many of them losing health insurance when they lost their jobs, Democrats are calling for bigger thinking on protecting people out of work and needing medical treatment.
“We need to reform the unemployment system and paid leave,” said Jackson. “Simply put, North Carolina has the worst laws in the country to compensate unemployed workers.”
“Expanded health care coverage would put us in a stronger position to deal with this epidemic or future epidemics,” Jackson added. “Plus, it would create healthcare jobs and build healthcare infrastructure – particularly in rural areas. Has the need for that investment ever been more clear?”
So far, the General Assembly is considering a Medicaid expansion limited to the prevention, testing and treatment of COVID-19. On Tuesday, the House Standing Committee on Health endorsed House Bill 1037 toward that end. Even before COVID-19, 1 in 10 North Carolina residents was uninsured, more than 1 million people.
Jackson also said the governor’s $75 million proposal for testing, tracing, data and personal protective equipment is crucial for business, to “keep us safe and allow us to get back to work more quickly.” In all, more than $300 million is tabbed for public health, safety and nutrition like the school lunches that have continued even as schools have been closed.
Cooper recommends another $300 million for local governments who’ve lost some of their own revenue with new COVID-related expenses.
Legislators in both parties have prioritized the small business relief package included in Cooper’s plan. The House Standing Committee on Finance Tuesday afternoon endorsed $75 million for the Golden Leaf Foundation to expand on the $15 million in loans it has already disbursed to businesses with under 100 employees.
“That was taken up in 48 hours, so the need is tremendous,” said Rep. Stephen Ross, R-Alamance, finance committee co-chair.