Legislative leaders, governor announce deal on rural broadband funding

Leaders in the General Assembly and governor say they have reached a deal to ensure $30 million for the GREAT rural broadband program.

GREAT is an acronym for Growing Rural Economies with Access to Technology, which provides matching grants to internet service providers and electric membership cooperatives to provide broadband in poorer or rural areas.

The issue of broadband funding became a point of confusion last month after a group of lawmakers wrote Gov. Roy Cooper asking why he seemed to have pulled $30 million in funding for the broadband grant program. Part of the confusion came over federal rules regarding deadlines for spending the money.

Unused COVID relief funds for rural broadband will replace $30 million in eligible expenses already incurred using General Fund dollars, a news release from General Assembly leaders says.

The legislature will vote on a bill early next year to redirect the $30 million in freed up General Fund dollars to the GREAT program.

“Expanding access to rural broadband is a shared priority, and I’m glad we could successfully resolve this issue,” Senate Leader Phil Berger, R-Rockingham, said in a news release.

Said House Speaker Tim Moore, R-Cleveland, “Rural broadband remains a top priority of this General Assembly, and our state is fortunate to have continued revenue availability to meet this need and make flexible budget adjustments as federal rules may require.”

In September, the legislature passed, and Cooper signed, legislation to allocate $30 million in federal CARES Act relief funding to North Carolina’s GREAT program, which provides grants to expand rural broadband access.

U.S. Treasury guidance jeopardized the eligibility of the funding because of questions about whether the CARES Act-funded rural broadband projects must be complete before a Dec. 30 deadline, the news release said.

To avoid potential issues associated with the risk of ineligibility, the legislative and executive branch successfully negotiated a solution, lawmakers say. The executive branch will use the flexibility afforded by state law to redirect the $30 million previously allocated to the GREAT program to other eligible expenses for which state General Fund dollars would have been used.

The legislature will then vote on a bill early next year to appropriate the newly freed up $30 million from the General Fund to the GREAT program.

Until the legislature formally appropriates the $30 million early next year, the Office of State Budget and Management will proceed with the administrative process of reviewing grant applications from providers and preparing contracts, the release says. That process generally takes several weeks anyway, so the time delay in awarding broadband grants under this new plan will be negligible.

“Realistically, the federal government would not have taken back the $32 million if OSBM had not stepped in, and it will not take the money back in this case,” said Joe Coletti, John Locke Foundation senior fiscal policy fellow.