UPDATED, 2:40 p.m. to include statement from Senate leader Phil Berger’s office.

Democratic Gov. Roy Cooper finally sat down with Republican legislative leaders Wednesday, June 19, less than two weeks before the end of the fiscal year, to negotiate a budget.

But the chief obstacle to the General Assembly’s $24 billion General Fund budget for 2019-20 remains: Cooper’s insistence that any spending plan includes Medicaid expansion.

Without that and a handful of the governor’s other priorities, he could veto the budget. Republicans lost their veto-proof supermajorities in the 2018 elections and don’t have enough GOP votes to override a veto. Political analysts say a stalemate could linger for months unless Republican leaders can tempt a few Democrats to oppose the governor with offers targeted to them or their districts.

The House- and Senate-passed budgets are in a conference committee. The negotiated conference report may be released early next week for General Assembly votes.

Cooper hosted Senate Majority Leader Harry Brown, R-Onslow; Sens. Kathy Harrington, R-Gaston, and Brent Jackson, R-Sampson; and Reps. Donny Lambeth, R-Forsyth; Linda Johnson, R-Cabarrus; and Jason Saine, R-Lincoln, for budget talks at the governor’s mansion. House Democratic Leader Darren Jackson, D-Wake, and Budget Director Charlie Perusse also attended.

According to a news release from the governor’s office, Cooper told lawmakers he opposes corporate tax cuts and school vouchers. He wants to issue a $4 billion bond to pay for school construction and renovation instead of using $2 billion from the State Capital and Infrastructure Fund on a pay-as-you-go basis. Cooper said those Republican priorities siphon money from education and health care.

Cooper told lawmakers everything, including Medicaid expansion, should be part of a budget compromise.

Republicans weren’t moved, the release said. So Cooper recommended separating health-care discussions from the budget talks. N.C. Department of Health and Human Services Secretary Mandy Cohen would negotiate health care issues and Medicaid expansion with House and Senate leaders. Perusse and other budget leaders would negotiate the larger budget framework.

Cooper told lawmakers he wants to reach an agreement on an overall spending level so negotiations can move, and hopes the discussions don’t drag out.

Pat Ryan, spokesman for Senate leader Phil Berger, R-Rockingham, offered a statement to Carolina Journal Wednesday afternoon.

“We appreciate the governor’s statement and welcome any opportunity to discuss Medicaid expansion and the budget separately. We’ve said all along that a $24 billion budget and countless policy choices shouldn’t be held up because of a single policy disagreement,” Ryan said.

Brown, Harrington, and Jackson delivered a letter to Cooper Tuesday saying they also seek compromise. They said Cooper’s staff has told legislative staff the governor would reject any budget without Medicaid expansion.

Lawmakers consistently have opposed Medicaid expansion. They worry that there is no guarantee the federal government will continue to pay 90% of the added costs. House Speaker Tim Moore, R-Cleveland, has said previously the government funding is expected to drop to 65%. That would leave state taxpayers on the hook for billions of dollars.

Already this year the federal government cut about $100 million for N.C. Health Choice, a government insurance program for low-income children.

The letter said Medicaid expansion would give able-bodied, working-age adults priority over individuals with intellectual and developmental disabilities. Children, pregnant mothers, and the elderly would have to compete with the new Medicaid population for the limited number of doctors who accept Medicaid.