Gov. Roy Cooper proposed a $25.2 billion General Fund budget for 2019-20 that would increase spending by more than $1.3 billion over the current fiscal year. He recommends spending $25.9 billion in the second year of the budget cycle.
“We have to be determined to be bold,” Cooper said at a Wednesday news conference. He said his budget “includes much needed visionary investments in our schools and our communities.”
Unlike his past two budgets, Cooper did not call for cutting taxes.
But he would create taxes to pay for expanding Medicaid enrollment by 600,000 people, a top priority in his budget. Under expansion, state taxpayers pick up 10 percent of the cost. Federal taxes cover the remaining 90 percent. An assessment on hospitals would pay for 75 percent of the state share. Medical insurance companies involved in Medicaid expansion would pay the other 25 percent state share.
The N.C. Healthcare Association strongly opposed Medicaid expansion assessments when Cooper floated the idea in 2017. The state’s matching share was just 5 percent then.
While most lawmakers have been frosty to Medicaid expansion, Cooper said it must get done before this legislative session ends, either through the budget process or by legislation. “We may be up here a long time because we’ve got some differences,” Cooper said. “There are some issues that are critically important to our state.”
Cooper’s plan directs spending $268 million from a Medicaid reserve fund to begin moving Medicaid operations into a managed care system that launches Nov. 1.
Legislative Republican budget writers responded sharply and swiftly to Cooper’s spending plan.
“This is not a serious budget proposal. It is a political document that seems designed to cater to the governor’s tax-and-spend base that put us in a hole 10 years ago,” Sens. Harry Brown, R-Onslow, Kathy Harrington, R-Gaston, and Brent Jackson, R-Sampson, said in a joint press release.
“After speaking for months about the importance of collaboration, Governor Cooper didn’t bother sharing his budget with anybody in the legislature before his press conference. But he did take credit for policies Republicans passed over his veto,” Senate budget writers said in their joint statement.
More than half the budget would fund public education. He also backs a bond proposal that’s more than double one promoted by House Republican leaders.
Cooper wants to give non-certified school personnel, law enforcement officers, corrections officers and Department of Health and Human Services employees working in institutions a recurring $500 raise. He is proposing all state workers receive a one-time, 1.5 percent cost of living adjustment or $500, whichever is greater.
Cooper wants to spend $140 million for rural infrastructure, housing, broadband connectivity, and other programs. The Rural Investments Strengthening Economies program would have $5 million in competitive grants available to the 80 most distressed counties. It would be like the Job Development Investment Grant program that helps larger counties recruit business, and help them pay to relocate.
The plan would spend $28 million for what are termed local transformational projects. Of that, $15 million would help develop a Marine Industrial Park in Perquimans County; $8 million would be for a year-round Rock Speedway and Entertainment Complex in Richmond County; and $5 million would be spent on infrastructure in Lenoir County and Kinston.
Cooper also recommends $288 million in limited obligation bonds. Of that total, $258 million would pay for the relocation of the N.C. Department of Health and Human Services from the Dorothea Dix Park. No new location has been selected. The move is necessary because the state sold that property to the City of Raleigh.
The other $30 million would be used to renovate and expand the Department of Environmental Quality’s Reedy Creek Lab to better detect and identify air, water, and soil pollutants in the face of GenX contamination of the Cape Fear River Basin.
The budget would grow by 5.4 percent, which is above the combined rate of inflation and population growth General Assembly budget writers use as a ceiling for new spending. State Budget Director Charlie Perusse said the so-called TABOR limit is about 3.8 percent.
Cooper said there’s no question fighting for his past budget recommendations forced lawmakers to fund some budget items they did not want to.
He thinks he is in an even better negotiating position this year. Republicans lost their veto-proof legislative majorities in the November election. He said he’s spoken to Republican and Democratic leadership about what the change in party balance means for them.
“At some point we’re going to have to work together to come to consensus on this budget,” Cooper said. “There’s going to have to be give and take.”