State budget, other major issues still undecided as NC legislature lingers into summer
North Carolina lawmakers still have a long list of major issues to decide before they wrap up this part of the General Assembly session.
The biggest: A new state budget, which the highest ranking members of the General Assembly’s Republican majority have been hashing out for weeks, negotiating in secret between competing House and Senate proposals.
They’ve broken the logjam on some of the budget’s biggest building blocks, coming to agreement recently on raises for teachers and state employees, as well as a new tax cut plan.
But they haven’t released many details, and budget negotiators still have work to do before a final plan emerges. On Thursday House Speaker Tim Moore said he and Senate leader Phil Berger, along with their top budget writers, had a list of “probably 100 or 120 some-odd items” left to hash out.
“We’ve been told to come back Monday, start early,” House Appropriations Chairman Donny Lambeth said last week. “Start pulling it together so we can roll it out as quick as we can.”
Berger said Thursday that while the most high-profile issues like plans for tax cuts and state employee raises are finished, the House and Senate still need to come to an agreement on issues like where to spend money on new construction or infrastructure projects.
“There’s a fairly significant amount of money that they’ve got to work through and figure out,” Berger said of the legislature’s top budget writers. “Water and sewer, capital [projects], some other items.”
Once a budget passes, a previously approved Medicaid expansion — giving hundreds of thousands of North Carolina’s working poor taxpayer-funded insurance — would go into effect. Tying expansion to the budget gave the legislature’s Republican majority more leverage over Democratic Gov. Roy Cooper and legislative Democrats, who may have to swallow policy changes Republicans bake into the budget to achieve their long-desired expansion.
“They put everybody in a difficult position when they put policy matters in the budget,” Cooper said last week. “Sometimes it’s a big surprise what issues are there. Sometimes they aren’t in either one of the budgets and then magically appear.”
Possibly appearing: Language authorizing new casinos, though as the days drag on the prospects dim that high-ranking Republicans pushing for more gambling legislation can convince enough rank-and-file conservatives to vote for it.
Berger told reporters Thursday he believes casinos would provide a much-needed economic boost to rural areas like his own district, on the Virginia border north of Greensboro. But Moore offered no similar enthusiasm about the idea, declining several times to address in detail the casino legalization proposal.
Lawmaker’s also have six bills Cooper vetoed last month awaiting likely override votes, which are expected as soon as Republicans in both chambers have good enough attendance to flex their veto-proof supermajority, which is just strong enough to overturn the governor’s veto without help from Democrats, assuming the GOP votes together. That supermajority has a perfect 8-0 override record so far this session.
Beyond the overrides and the budget, don’t expect a lot of fresh action. Lawmakers have largely shut down the committee process that hears legislation, and hundreds of bills that have already passed the House or the Senate will likely sit where they are without becoming law.
The bills will stay eligible, though, for next year, when lawmakers tackle the second leg of North Carolina’s two-year legislative session.
Legislators also plan to reconvene later this year to rework state election maps, drawing anew the lines that go a long way toward deciding who represents the state in the U.S. House of Representatives, as well as the North Carolina House and Senate.
That will likely happen in September or October. But the timetable is subject to change and is based on the current expectation that lawmakers will finish their work on the state budget and a handful of other issues over the next few weeks.
Here are some of the major unfinished issues facing the legislature this session:
Gambling. Lawmakers already approved mobile sports betting this year, the largest expansion of legal gambling in North Carolina since the legislature approved the state lottery in 2005. They also may authorize four new casinos and video lottery terminals, which are slot-machine-style machines that could potentially become legal in restaurants and gas stations across the state. These talks have been secret, with even high-ranking lawmakers saying they’re not involved, but negotiators have acknowledged they’re considering both options and that authorizing language ultimately may be part of the budget, which would save lawmakers from having to authorize another massive expansion of gambling in a stand-alone bill. Supporters see economic development and new tax revenue the state could use to fuel tax cuts. Opponents say gambling is socially destructive and criticize what they describe as a lack of transparency in the debate.
Medical marijuana. Moore has all but declared dead the Senate’s proposal to legalize medical marijuana for this year — the second year in a row the measure cleared the upper chamber and failed in the House. Nothing is over on Jones Street until the final gavel, but Moore has said repeatedly that the bill doesn’t have enough support among the House’s Republican majority to pass this session, despite sponsorship from powerful Senate Rules Chairman Bill Rabon, R-Brunswick, who has indicated he might attempt to hold up House priorities until the marijuana bill moves. That possibility leaves the door open on the bill, at least a crack. Supporters note strong public support for the shift, but social conservatives are looking to hold the line against an expansion of legalized drug use.
Tax cuts. Budget negotiators reached an agreement recently to accelerate tax cuts already on the books, but they haven’t released details. Moore said last week that new cuts would be tied to revenue triggers, meaning they’d only go into effect if the state hits certain revenue targets. The strategy is a hedge against a potential economic downturn. Gov. Roy Cooper has pushed back against the already-planned tax cuts and any new ones, saying they’ll blow a multibillion-dollar hole in the state budget, starving public schools that he says are underfunded. Republicans say tax cuts they’ve phased in over the last decade are one of the main reasons the state’s economy is booming.
State employee raises. Republican legislative leaders say they’ve reached an agreement on raises for teachers and state employees. However, they have yet to release any details about the plan. Moore called the agreement a compromise. The senate had proposed an average raise of 4.5% over the next two years for teachers, while the house had proposed a 10.2% average teacher pay raise. The house also sought higher raises for state government jobs that have been hard to fill, such as positions in state prisons and law enforcement.
Private school vouchers. An expansion of the state’s controversial Opportunity Scholarship program is expected to be incorporated in the state budget and passed. The effort would replace the program’s income caps with a tiered system that lets any family receive public funding to send their students to private schools. Under bills proposed earlier this year, the state would write a check to private schools that accept students who apply for the program, granting vouchers of more than $7,000 annually in some cases. It’s unclear exactly how much the GOP legislators will boost the program. Earlier proposals called for increasing the vouchers budget from from $133.3 million this year to more than $400 million over the next two years.
Republican supporters argue that investment in private school vouchers provide some students a lifeline out of a public school that isn’t working for them. Critics of the proposal worry that it would hurt enrollment at, and therefore funding of, public schools.
Expanding charter schools. Cooper vetoed two bills aiming to loosen charter school regulations – and GOP legislators have yet to vote on overriding him. The Charter Schools Omnibus bill, also known as HB 219, would allow charter schools to seek taxpayer money for capital expenses, such as construction, renovation or building purchases. Charter schools are currently responsible for securing their own funding for buildings. The bill would allow county governments to raise taxes to generate capital funds for charters.
Supporters say the bill is needed to bring charter schools on a level playing field with traditional public schools, which are already fully funded by taxpayers. But critics say it could further strain resources in counties that counties already struggle to fund traditional public school buildings.
The bill would also remove a cap on enrollment growth at low-performing charter schools, allowing them to add enrollment over time without state approval. It would also add a loophole to state laws that require charter schools to admit students through a lottery – allowing charter schools to give preference to students in certain preschools.
Another bill, House Bill 618, would shift the charter school approval process from the State Board of Education to the Charter School Advisory Board. The State Board of Education would only be able to consider appeals of the charter board’s decisions.
Cooper vetoed the bill, calling it “a legislative power grab that turns that responsibility over to a commission of political friends and extremists appointed by Republican legislators, making it more likely that faulty or failing charter schools will be allowed to operate and shortchange their students.”
LGBTQ rights. Cooper vetoed three bills that could affect transgender youth. Legislators are expected to vote to override the vetoes before the end of the session. The bills are:
- Banning gender-affirming care. House Bill 808 would ban any medical professional from providing gender-affirming medical care to anyone under the age of 18, even with parental consent. The ban would cover puberty blockers, hormone treatments and surgical interventions – which are rarely performed on people under 18.
- Restricting transgender athlete participation. House Bill 574 would ban transgender girls and women from competing in girls’ or women’s sports in middle school through college. It would apply to both public institutions and private schools and universities. If enacted, the bill would also create a two-year window for a student who “is likely to suffer direct or indirect harm” from a violation of the policy, or who is deprived of an athletic opportunity by a transgender female, to sue the school that allowed the athlete to compete.
- Parents’ Bill of Rights. Senate Bill 48, known as the Parents' Bill of Rights, would ban the topics of sexuality, sexual orientation and gender identity from any curriculum or classroom materials in kindergarten through fourth grade. It would also require schools to inform a student’s parents if the student asks to be called by a different name or to use different pronouns.
Republican supporters say the measures will protect children, female athletes and a parent’s right to decide what their children are taught. Opponents say the measures target an already struggling minority of children and predict they’ll face higher suicide and depression rates as a result.
Election law changes. Republicans in the state senate recently passed bills that would curtail mail-in voting and give the GOP more power on the state board of elections. The House hasn’t taken them up yet but is expected to in the coming weeks. Among the proposals:
- Tightening mail-in ballot deadline. Senate Bill 747 would require mail-in ballots to be counted by Election Night. The state currently counts mail-in ballots three days after Election Day, so long as they were postmarked before Election Day. The grace period is intended to account for slow U.S. Postal Service delivery. The bill would also require county elections boards to use signature-matching technology to verify the validity of mail-in ballots.
- Elections board control. Senate Bill 749, meanwhile, aims to reduce the governor’s influence over the State Board of Elections. It would create a board with equal numbers of Democrats and Republicans — eliminating a state law that gives a tie-breaking vote on the board to the political party that holds the governor's office. Previous efforts to dilute the governor’s power on the state board were struck down by the courts.
NCInnovation. A nonprofit organization whose board includes heavy hitters from the state’s business and university communities wants $1.4 billion to endow a startup accelerator focused on helping university researchers turn their ideas into businesses. Moore said last week that the idea would likely be included in the budget, but not with the full $1.4 billion and that questions remained about the rules the group would operate under. Moore didn’t say how much funding the effort would receive. Supporters say the program is needed to spur more economic development in less active parts of the state. Opponents say it’s a massive, risky expense.
UNC Health, ECU Health. Moore said last week that controversial antitrust exemptions that are meant, at least in part, to help UNC Health expand and potentially partner more easily with ECU Health, won’t be part of the budget agreement. Budget writers are still discussing hundreds of millions of dollars in state funding, though, to build health clinics that UNC and ECU would partner in as part of a Senate-proposal called NC Care. Supporters of the funding say more medical options are needed in remote parts of the state, but the funding will be weighed against other funding priorities.
Atrium expansion. The Senate budget included language that would allow Charlotte-based hospital network Atrium Health to expand around the state, which has long been a priority for the system. It’s a small change in state law that could have major ramifications in the state’s health industry, and other hospital systems oppose the shift. The House would have to come on board with the Senate’s idea for this to pass, but the measure’s fate remains a mystery. Because of the way Atrium is structured, competitors say removing state limits on expansion could give it an unfair advantage. But with already approved changes in other competition-limiting hospital regulations taking effect as part of the state's Medicaid expansion deal, Atrium fears this long-standing limit on their growth will favor for-profit hospitals and out-of-state players.
Reducing gubernatorial appointments. Republican legislators have introduced bills that would allow the legislature to appoint more members to various state boards — at the expense of the governor. For example, the governor currently appoints 14 members to the state Board of Transportation and the legislature appoints six. A proposal from the House GOP would flip those numbers. House and Senate leaders are expected to pursue a final bill in the coming weeks. Even if it passes, a legal challenge is likely as the legislative and executive branches have fought over separation of powers issues for years.
Homebuilder regulations. House Bill 488 would reorganize the state’s Building Code Council and create a new Residential Code Council, while amending various provisions of the state’s building codes and regulations. Cooper vetoed the bill, saying it would “wipe out years of work to make homes safer and more affordable, it also violates the [state] constitution by rigging the way rules are made.” Legislators are expected to override Cooper’s veto of the bill, which received bipartisan support in both chambers.
Day care funding. Four months ago major state funding to help subsidize child care and make it easier for parents to go to work seemed to have momentum. The NC Chamber, the state’s largest business booster, called for $300 million to replace pandemic-era federal funding set to run out later this year. Although some industry reforms have passed, and the Senate proposed some funding, the big pot of money never materialized and doesn’t seem likely to, leaving many worried that the already difficult task parents often face of finding child care will get more difficult in the coming year without subsidies to boost pay rates and staff up child care centers.
Regulatory reform. The legislature’s near-annual package of business regulation changes has passed both the House and Senate with bipartisan support (though most Democrats in both chambers voted against), but with different language. Negotiators are reconciling that language now, and it is poised for final passage in the next few weeks. House Bill 600 touches dozens of state regulations, including water quality rules. The Southern Environmental Law Center has called the latest version “an environmentally damaging bill.”
Mental health funding. Two months ago a key House budget writer proposed spending $1 billion in pandemic-era federal funding on mental health. The likely total proposed funding has shrunk, but House Appropriations Chairman Donny Lambeth said last week there’s still a good chance that hundreds of millions of dollars in new mental health funding will emerge in the final budget, with a blend of one-time federal funding to open more facilities and recurring state funding to boost the system long-term.
Credit union changes. A major rewrite of the rules credit unions live by, rolling back legal limits on what types of customers they can serve, passed the House with bipartisan support in April and has been sitting in the Senate ever since without movement. It’s expected to stay that way for the rest of this session, though Senate consideration is likely next year. Banks generally opposed the measure, House Bill 410, saying the bill would blur the line between banks and credit unions and give credit unions unfair advantages.
WRAL State Government Reporter Will Doran contributed to this report.
