Saying that it invests in North Carolina’s “families, businesses and communities,” Gov. Roy Cooper presented his proposed 2022-23 budget, full of significant appropriations meant to deal with some of the state’s biggest problems — out-of-control housing costs, an increasingly competitive economic development landscape, a lack of law enforcement resources, threats to the natural environment, an underfunded educational system and affordable access to health care coverage.
“North Carolina is emerging from the pandemic stronger than before, and we will sustain that only if we invest in a strong foundation for our people: A quality education, good jobs and infrastructure, and access to affordable healthcare,” Cooper said in a May 11 press release. “Let’s use this historic opportunity to give families, businesses and communities the tools they need to thrive.”
First-time homebuyers could qualify for some of the $50 million that would be available for down payment assistance, not including additional help for firefighters, EMS or law enforcement personnel and public school teachers.
Almost $28 million would be added to the state’s Housing Trust Fund, alongside an additional $12.3 million to help people with mental illness transition to communal living and $4.3 million in rental assistance for low-income or disabled people.
On the economic development front, Cooper proposes more than $160 million to support existing businesses, as well as attract new ones. That includes a one-time $131 million allocation for courting major employers, like the state recently has with Apple and Toyota.
The money would be used to hire a site selection firm ($1 million) to identify up to 10 major sites across the state and then provide grants to local governments ($50 million) to acquire the sites and build out public infrastructure ($50 million) to them. There’s also a $10 million infrastructure grant pool for distressed communities looking to develop their own sites.
The proposed budget also creates a one-time $10 million grant pool to pay for police body cams in designated Tier 1 and Tier 2 communities. The state measures economic distress by using a number of factors and divides all 100 counties into three separate tiers each year, with tier 3 counties being the most prosperous. In Western North Carolina, only Buncombe, Henderson and Transylvania counties were designated as Tier 3 for 2022, meaning most counties west of Asheville could qualify for the grants.
North Carolina’s environment, from the mountains to the sea, is not only a precious natural resource, it’s also a major driver of the tourism economy — especially in the west. Cooper’s budget advocates for energy efficiency and clean energy in several ways, including the establishment of a $10 million nonrecurring grant program for K-12 schools to establish clean energy practices.
It also prioritizes clean water, with a $20 million recurring allocation for degraded streams and stormwater treatment as well as $18 million for buyouts of swine farms located in floodplains. In 2016, Hurricane Floyd breached more than a dozen hog waste lagoons, spilling excrement and dead pigs into waterways.
Of particular interest to taxpayers in Buncombe and Haywood counties is the $50 million allocation to the Department of Public Safety (DPS) to help with lingering housing needs related to Hurricane Florence or Tropical Storm Fred, the latter of which ravaged Canton.
There’s also $5 million for the repair of private roads and bridges associated with the storms, and another $5 million for debris removal. Both remain major issues in Cruso for homeowners ineligible for assistance from the US Federal Emergency Management Agency.
The state’s parks aren’t neglected in Cooper’s proposed budget; more than $3.5 million in recurring funding has been added to the state’s Parks and Recreation Trust Fund (PARTF), along with a one-time $20 million infusion.
For the past 25 years, PARTF has provided matching funds to local governments for projects ranging from state parks to neighborhood parks. In the 2020-21 fiscal year, PARTF distributed more than $17 million. In 2016, Canton’s Champion Aquatic Center received $350,000 from PARTF for vital repairs.
The governor’s $526 million education budget includes $90 million to enhance early childhood education, including $42 million for pre-K expansion. As part of a larger compensation package meant to restore state employee purchasing power, Cooper proposes at least a 7.5% raise over the next two years, and the restoration of master’s pay ($9 million).
By far the most controversial — and cheapest — item in Cooper’s budget is, once again, Medicaid expansion.
If adopted, the expansion could provide affordable health care access to more than 600,000 residents of North Carolina. In 2019, only nine states had more uninsured residents than North Carolina.
The US Census Bureau puts the 2019 figure of uninsured North Carolinians at 11%, largely because of income levels associated with qualification. Right now, a family of four can qualify for Medicaid if total household income is less than $11,655 per year. Cooper’s proposal would raise that limit to $38,295.
Expansion wouldn’t require state funding. In fact, North Carolinians are and have been paying for it through federal taxes that get sent to Washington, never to return. The federal government would cover 90% of the cost of the expanded population, with health insurance providers and hospitals paying the rest. If North Carolina follows the other 39 states that have expanded Medicaid, it would likely see savings in the general fund similar to those seen in expansion states. North Carolina’s projection is $71 million.
Cooper had proposed Medicaid expansion back in 2019, which the Republican-dominated General Assembly wouldn’t agree to, forcing a two-year budget stalemate during which spending levels didn’t really change much.
State budgeting is a three-way street. The governor, the House and the Senate all propose their own budgets and then attempt to reach consensus with a conference budget that must be adopted by July 1.
Western North Carolina’s Republican Sen. Kevin Corbin, R-Macon, an advocate of expansion, isn’t exactly sure Medicaid expansion will make it to the finish line.
“I think there’s a pretty good chance the Senate will be for it,” Corbin said. “I believe in our caucus there is support for it. I can’t speak for the caucus, but I believe if it came to a vote, there would be enough votes in the Senate to support it. The holdup has been the House.”
Expansion faces a difficult path in the other chamber, but it’s possible the conference budget could include it.
“My thinking is, the House is not willing to do it, but if it winds up being a negotiating point, everything’s on the table,” Corbin said.
Read Cooper’s proposed budget in its entirety at osbm.nc.gov/media/2569/open.