Cooper calls for teacher bonuses, unemployment boost, borrowing for school construction

The governor would spend a combination of state money, federal funds earmarked for coronavirus recovery – the money must be spent by the end of the year or returned to the federal government – and a blend of bonds, including $4.3 billion requiring voter approval next year, in a proposal that may be dead on arrival at the General Assembly.

The governor also pressed Republican lawmakers Wednesday, as Democrats have for a decade, to expand Medicaid, extending insurance benefits to hundreds of thousands of North Carolina's working poor, with federal taxpayers paying the tab.

There's no indication the GOP majority will do that, and the issue will likely divide the two major parties in the coming November elections, when the governor's office and control of the General Assembly are up for grabs.

"Being able to see a doctor when you're sick shouldn't be a luxury," Cooper said Wednesday, questioning why Republicans wouldn't follow 38 other states in expanding Medicaid.

"Here it is, right here," said the normally reserved governor, turning fiery for a moment, "and they're not going to do it? I don't understand it. ... We can do it, just like that."

Cooper's plan doesn't include a tax increase, but it dips into a one-time $457 million boost in tax collections to cover teacher bonuses and other increases, including $1,000 bonuses for bus drivers and other non-certified school staff and $1,500 for employees at state universities and community colleges.

Lawmakers announced the collections increase last week but cautioned that it's largely just a quirk in this year's schedule.

Because of the pandemic, the state moved its income tax deadline from April 15 to July 15. Fewer people took advantage of the delay than expected, boosting collections in the last fiscal year and potentially eating into this year's revenue. Senate budget writer Harry Brown, R-Onslow, said it would be "outrageously irresponsible, reckless and negligent" to spend all of that money and reduced Cooper's plan to "spend now, pray later."

Brown and other Republicans compared it to state budgets Democrats wrote during Gov. Bev Perdue's administration, which eventually led to layoffs and salary cuts a decade ago during the recession.

"When my small business' accountant tells me some money on the balance sheet might disappear next month, I don't run out and spend it," Sen. Warren Daniel, R-Burke, said in a statement sent out by Senate Republican leadership.

The state's economic outlook is unsure enough that the General Assembly's Fiscal Research staff declined earlier this month to put out a state revenue forecast for the coming year. Usually, the state budget is built on that forecast, which now won't come until "late September at the earliest," legislative economist Barry Boardman said in an email.

By then, the state may have more information from Congress about what to expect from future coronavirus stimulus programs and how the state can spend funds Congress already appropriated. There's enough confusion that Fiscal Research puts the available federal coronavirus funding that the state has to spend or lose by the end of this year between $552 million and $903 million.

Cooper's budget assumes Congress won't let the state spend that money to boost the Department of Transportation, so it took $300 million set aside earlier this year to get more road projects going and appropriated it for other things. The governor also wants to dip into the state's Opportunity Scholarships program, a private school voucher program favored by Republicans, to the tune of $85 million.

Students already on the vouchers could continue, but the program has never spent all of the money lawmakers allocated toward it, and Cooper wants to sweep up the extra to fund other priorities, including the $2,000 teacher bonuses.

The program would still get $75 million a year, but scholarship supporters reacted immediately, noting Cooper's continued targeting of the program for cuts.

"Under the Governor's 'equity' plan, only the wealthy can attend private school," Sen. Deanna Ballard, R-Watauga, said in a statement.

Cooper's unemployment plan would boost the state's weekly benefits, now capped at $350, to $500. It would also increase the number of weeks people can draw unemployment from 12 weeks to 24.

"Helping the unemployed is what this trust fund is for, so let it do some work," he said.

Right now, the federal government is extending those benefits past the state's normal 12-week cap, but a federal increase in weekly payments has run out. Congress may eventually approve another increase, but Cooper's changes are more long term and wouldn't take effect until October.

It's possible lawmakers will tinker with the unemployment system this year. A proposal to boost weekly payments cleared the Senate earlier this year but stalled out in the House.

As for the bonds, Cooper proposed two. One lawmakers could approve this year, without going to voters. He wants that to total $988 million and fund the following:

Cooper wants to ask voters to approve another $4.3 billion in borrowing next year:

General Assembly leaders may be planning for a much more scaled down budget plan, at least when they come together next week. Senate leaders identified their priorities last week for what may be a very short session. It was a short list, but with the potential to grow: