As budget logjam continues, Cooper pitches new plan

Senate leader says there's no deal as long as Cooper insists on Medicaid expansion.

Posted 4:04 p.m. Jul 9, 2019 — Updated 8:50 p.m. Jul 9, 2019

Travis Fain

, WRAL statehouse reporter

RALEIGH, N.C. — Gov. Roy Cooper pitched Republican leadership on a new budget plan Tuesday morning, laying out a proposal that keeps his biggest ask – Medicaid expansion – in place and concedes a handful of smaller issues to the legislative majority.

Senate President Pro Tem Phil Berger said the governor's proposal didn't change much. The governor still wants Medicaid expansion, he's holding up the budget to get it, and the votes still aren't there for expansion in the Senate, Berger said.

That's regardless of whether an expansion proposal moving for the first time in the House makes it to the other chamber, the Senate leader said.

Berger, R-Rockingham, told reporters that Cooper's latest pitch, "looks to be, in many respects, a warmed-over copy of his original budget proposal."

"It's clear .... that everything hinges on Medicaid expansion," Berger said. "So, I don't know that any of the specifics are serious proposals."

House Speaker Tim Moore didn't immediately respond to Cooper's proposal, though he and other GOP leadership have been huddling throughout the day and working Democrats in the hopes of overriding Cooper's budget veto and making the governor's newest proposal moot.

House Rules Chairman David Lewis said in an afternoon statement that "North Carolinians deserve better than Governor Cooper’s petulant veto" and that Cooper is "holding the entire State hostage to coerce one policy preference."

There is significant pressure to break the logjam on the state's $24 billion budget and help bring this legislative session to an end. The governor and Democratic leadership in both the House and the Senate are trying to make sure their members stick together on a veto override vote that could come at any time.

Among other things, Cooper's proposal would do the following:

Expand Medicaid in North Carolina, providing taxpayer-funded health insurance to hundreds of thousands of people without the work requirements or premiums that are part of a compromise expansion bill that cleared a House committee on Tuesday morning with Republican support, after months of sitting without movement. Cooper said he was willing to negotiate on these requirements, but his proposal doesn't include them.
Boost teacher salaries about 8.5 percent over two years, compared to his initial pitch of about 9 percent and a General Assembly budget that included a little less than 4 percent raises over two years.
Pay for the larger raises by doing away with a franchise tax cut for businesses that has been a priority for legislative leadership. Cooper's proposal would keep a separate increase in the state's standard deduction, providing people with a small income tax cut.
Cut back on the governor's plan to borrow money for school construction, moving to a hybrid between his preferred bond package and a pay-as-you-go plan favored by Republican legislators

The governor's pitch also kept local projects that are funded in the Republican budget, protecting pork that might entice Democrats to break with the governor and vote to override his budget veto. Berger suggested Monday night that, if an override fails, all that money will go away, and legislators will have to explain to folks back home what happened to millions of dollars in state funding.

Cooper's proposal also moves away from a GOP plan to move the state Department of Health and Human Services headquarters from Dorothea Dix Park in Raleigh to Granville County. Instead, Cooper would study where to move DHHS headquarters. His administration had planned to keep it in Raleigh.

The governor accused legislative leadership of dangling a DHHS move to multiple counties to win votes for their override attempt. Berger said Tuesday afternoon that he hasn't offered that deal to anyone.

He does favor moving state jobs out of Raleigh, though.

"I'm sure that there will be conversations taking place with a number of people about whether or not any particular county is an attractive place," Berger said.

An override would begin in the House, though it's not clear when. Both chambers went in and out of session Tuesday as leadership tried to wrangle votes, but the House adjourned late in the afternoon without ever addressing the budget bill.

Democrats seem to have the numbers to protect Cooper's veto, and the governor said Tuesday morning he was confident of that. So did House Minority Leader Darren Jackson.

But the pressure is significant. The state employees association, which prefers the raises in the GOP budget to Cooper's proposal, took to Tweeting at Democratic House members thought to be on the fence Tuesday afternoon, asking them to vote for the override.

Rep. Marvin Lucas, D-Cumberland, said he's been lobbied by both sides but not threatened.

"Scale of one to 10, this is about a six," the 10-term House member said.

Lucas said he'd "probably vote for the governor" on an override, but he wouldn't say for certain. Cumberland County got a lot of local projects in the GOP budget, ramping up the pressure on lawmakers there. Rep. Elmer Floyd, D-Cumberland, said "there are some things in there that our community needs," but he also said he doesn't care for the budget overall.

Floyd wouldn't get specific when asked how he planned to vote on a possible veto override or about threats he may have heard as the arm twisting continues on Jones Street.

"It's just part of the turf," Floyd said. "You're going to get intimidation whether you go left or you go right."

Rep. Charles Graham, D-Robeson, declined shortly after 3:30 p.m. to say how he planned to vote. He just said "I think my mind's made up" and that he felt "no pressure at all."

Without an successful override, or Cooper or the Senate acquiescing on Medicaid expansion, it's difficult to see a path forward on the state budget.

Berger called for an override, with a special session to follow on Medicaid expansion but no guarantee expansion would pass. Cooper and the Democrats would lose leverage if they accept that.

The governor said the House's movement this week on expansion was a good sign but well short of his goal, given the Senate's opposition. Cooper said he doesn't expect Republicans to simply accept his Tuesday proposal, but he wants them to negotiate Medicaid and the budget as a package.

"We've already swallowed a lot that we don't particularly like [in the budget]," Cooper said. "They need to stop trying to override this veto and start negotiating."

State government will not shutdown without a budget; funding will simply remain as is. But new programs, including a large reform effort of the state's existing Medicaid program, will be delayed, as will planned raises for state employees and teachers.

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