State budget negotiations drag on with Medicaid expansion, casino legalization in focus
State budget negotiations, which have dragged past the July 1 start of the North Carolina fiscal year, are expected to run for weeks to come, lawmakers said Thursday. And while delays in the budget process aren’t unusual, rarely have they happened with as much at stake.
In addition to run-of-the-mill debates on issues like how much of a raise state employees should get, Republican legislators are also debating whether this new budget should be used to legalize casinos across the state. And as those and other debates hold up the budget negotiations, Medicaid expansion remains on pause. Although lawmakers did approve that earlier this year, they tied its fate to the budget's passage.
The legislature has had years with no new budgets due to political stalemates. Senate leader Phil Berger said he's confident that won't be the case this year. It's just a question of when a final deal will be reached, he said, and not if one is possible at all.
"It's just a matter of us working through these things," Berger said in an interview with WRAL on Thursday. "I don't see any roadblocks that will keep us from having a budget."
The new state budget, which will be roughly $30 billion once it becomes law, is bigger than it has ever been.
But more money can sometimes bring more problems. And this year the budget negotiations over how to spend the money — how to balance a combination of short-term and long-term projects, raises for state employees or further tax cuts — have dragged on for months.
Berger and Moore told reporters Thursday that negotiations continue and are expected to continue for weeks to come. They declined to provide more details on the broader budget talks. Neither chamber anticipates holding any votes next week, to give top budget writers more time to focus on figuring out the final details.
Hanging in the balance is Medicaid expansion, which would provide hundreds of thousands of the state’s working poor with insurance and pour billions of federal dollars into the state’s healthcare systems.
Long opposed by state GOP leaders until their high-profile reversal earlier this year, expansion will go into effect this year only once the new budget becomes law.
And another hot-button issue that could be tied to the budget is casino legalization.
Casino talks continue
Some Republican leaders believe casinos could help pay for some of the tax cuts they want, and could also boost the economy in struggling areas of the state by putting casinos in more rural locations. But the idea isn’t without resistance within the GOP, especially among religious conservatives who have a moral opposition to gambling.
Berger said Thursday that casino negotiations continue with closed-door talks among Republican lawmakers, details of which he declined to share.
The legislature passed a separate bill earlier this year legalizing online sports gambling, starting in 2024. But the issue of whether casinos should be allowed as well isn’t likely to be able to be debated on its own. Berger said Thursday that if it does move forward it’s likely to be rolled into the budget.
In July, WRAL obtained a draft copy of a bill for casino legalization that had been given to lawmakers. Berger confirmed Thursday that he’s been talking about that draft with other Republican lawmakers, although he said the details aren’t “etched in stone” and if the proposal winds up in the budget it could look different.
Under a recent draft proposal, one of the casinos would be built in Berger’s home of Rockingham County. He said that area, north of Greensboro on the Virginia border, has seen essentially no growth in the last 30 years even as North Carolina as a whole has boomed.
Berger said casinos could create jobs and growth in areas like that, or in Rocky Mount, another struggling part of the state that could also potentially see a casino if this legislation passes.
“One of the things that convinced me that it’s the right thing to do, was the idea that these entertainment areas — rural tourism areas — are things that could provide a boost to the economy,” Berger said. “A boost that has not been forthcoming, even with all the great things that are happening around the state.”
Moore largely avoided questions about the casino proposal, pointing out that it’s coming from the Senate, not his chamber of the legislature.
There are three casinos in North Carolina, two Eastern Band of Cherokee Indian casinos located in the far-western part of the state and a Catawba Indian casino on Interstate 85 near the South Carolina border.
Berger said he looks at what casinos have done for not just the Cherokee but all of Western North Carolina, and he sees an opportunity to recreate the economic benefits in other parts of the state.
“An investment of at least $1.5 billion, job creation of 5,200 jobs with no taxpayer dollars going into it — and, in fact, tax dollars coming to local communities and the state — just struck me as kind of the sweet spot,” he said.
The fact that the budget is now more than a month overdue doesn’t mean state government will come crashing to halt. Unlike the federal government, which can shut down if Congress doesn’t approve a budget, in North Carolina the state simply continues operating under the terms of the previous year’s budget until a new one is approved.
The lack of action, however, means that teachers are looking at the prospect of no new raises, at least immediately, as the 2023-24 school year kicks off this month. Other state workers are, too. Corporations that had been hoping to pay less in taxes likely want lawmakers to hurry up — as do the roughly half million uninsured North Carolinians who will qualify for Medicaid, under the Medicaid expansion deal tied to the budget.
As for when that all will happen?
“You're talking a couple of weeks out at this point, to put everything together,” Moore said. “But it is moving in the right direction.”
