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By Anne Blythe, Thomas Goldsmith, Rose Hoban, Taylor Knopf
Two weeks have passed since Gov. Roy Cooper stood with Democratic and Republican lawmakers outside the North Carolina Museum of History to announce that, in a new spirit of bipartisan negotiating, both sides of the aisle had come to consensus on how and when to reopen the state’s public schools.
On Wednesday, Cooper presented his proposed biennial state budget that called for spending $27.4 billion in the next fiscal year that begins July 1, and $28.5 billion for the fiscal year after that.
The governor’s proposal calls for expanding Medicaid and giving teachers higher raises than other state employees, hot-button political issues that created an impasse between the Democratic governor and Republican lawmakers and left the state without an orthodox two-year budget in 2019.
Since the 2020 election in which North Carolina voters again elected a Democratic governor while filling both General Assembly chambers with Republican majorities, lawmakers and the governor have made noises about trying to work together more.
The months ahead will tell whether the historic moment displayed outside the history museum two weeks ago is a harbinger of a more bipartisan future, or if the budget process once again will break down along party lines.
“Unlike the last budget cycle that we had, I have had numerous conversations with both Republican and Democratic leadership,” Cooper said during a briefing with reporters Wednesday. “One thing we agreed on is, first, the people of North Carolina elected us again so we’re back in the same situation that we were, and we owe to them to do the best that we can to find a path forward. We’ve all agreed that everything is on the table.”
Trying to persuade Sen. Phil Berger, the Rockingham County Republican leading the state Senate, to change his mind could prove difficult.
In an interview with the Associated Press a week ago, Berger dampened the enthusiasm among Democrats and some Republicans for the substantial incentives contained in the American Rescue Plan for states that have yet to expand Medicaid as allowed under the Affordable Care Act. The federal COVID-19 relief package would direct some $1.7 billion to North Carolina over the next two years if the state enacts the policy.
While acknowledging some gaps in health care coverage during the Associated Press interview, Berger described the federal assistance as temporary aid that might create a new level of dependence on government for able-bodied adults.
Charlie Perusse, the state budget director, added context for how the carrot being offered by the federal government could be used.
In North Carolina, that would mean some 600,000 people who are low-income workers without health insurance, people with disabilities and others who don’t now qualify for Medicaid, would have access to health care under the expanded federal program. The state would owe between $350 million to $400 million per year, Perusse estimated, for its share of the expanded coverage.
If North Carolina, one of 12 states to resist Medicaid expansion, received the $1.7 billion from the federal government, Perusse added, the state could cover its share of the expansion costs for four to five years without having to consider looking for a new revenue source or assessing health care providers.
“This is a very good incentive that the feds are providing us,” Perusse said. “There’s no better time than the present to expand Medicaid.”
After many school children did remote learning for nearly a year because of the COVID-19 pandemic, Cooper’s plan directs some $80 million to help the state’s 115 school districts hire more nurses, psychologists, social workers and counselors. Democrats in the legislature filed a bill to fund nurses this week and another one to fund school mental health professionals in February.
Cooper recommends putting a $4.7 billion general obligation bond on the November 2021 ballot to help public schools meet infrastructure needs, to do health and safety projects and more at UNC System campuses and more.
Cooper’s plan does not call for a tax increase.
Nonetheless, Republicans, who are weighing the possibility of income and corporate tax cuts, quickly responded to the Cooper proposal with concerns, raising questions about how much room there is for negotiations in the months ahead.
“We have concerns about the very high spending growth and billions in borrowing in Gov. Cooper’s proposed budget,” Sen. Brent Jackson, a Sampson County Republican and Senate budget writer, said in a prepared statement posted to Senator Berger Press Shop. “We don’t want to return to an era of rollercoaster-style budgets with huge spikes in the boom years followed by huge cuts in the lean years.
“Thanks to a decade of predictable, responsible budgeting, North Carolina weathered the COVID-19 pandemic and recession without cutting state services or freezing teacher pay.”
The lawmaker concluded his statement with an olive branch, of sorts.
“We look forward to working together to achieve an enacted budget,” Jackson said.
Starting to perk
Just a short hike from the governor’s Capitol offices, the General Assembly building on Jones Street typically bustles with lobbyists and lawmakers, but this year the scene has been unusually quiet. Most office doors were closed this week, only a handful of people hung around in areas usually humming with activity.
“Lobbying is about being down at the building, being in the committee rooms and meeting with legislators in the elevator or hallway,” said Valerie Arendt, a registered lobbyist for the NC Chapter of the National Association of Social Workers. “A lot of us are not prepared to do that because of COVID. Some legislators are willing to meet with us virtually and some are asking us to come into the office.”
She said that’s made her job harder.
But now that lawmakers, lobbyists, staff, and even members of the media are getting vaccinated against COVID-19, people are beginning to drift back into the building.
“People seem to be coming back. A bit more each week,” texted Cone Health lobbyist Ryan Blackledge.
Nonetheless, lobbyists and advocates have been making their priorities known, albeit less efficiently.
“There’s texts, there are phone calls, there are the painful Zoom meetings,” said Blackledge in a later call. He talked about the things he couldn’t do, “like after a committee meeting, grabbing three other people, getting the bill sponsor and having a three-minute conversation where you fix something that would take hours texting back and forth between people.”
Mental health funding priorities
When the pandemic hit and the need for mental health and substance use treatment services surged, North Carolina’s provider organizations were already at a disadvantage, according to advocates.
Because state legislators were unable to pass a new budget in 2019 or 2020, some programs were left hanging.
“New programming couldn’t come to fruition, and it was harder for programs to pivot and meet the new needs when the pandemic hit,” Arendt said.
Due to pandemic-related hardships and job losses, North Carolina saw an increase in Medicaid enrollment last year, Arendt said.
“There’s going to be a tsunami of behavioral health needs because of the pandemic, even if everyone does get vaccinated and things go ‘back to normal,’” Arendt said. “Folks are going to need mental health and substance use services for a long time.”
This increase in demand comes on the heels of five years of cuts — totaling $500 million — to mental health single-stream funding, the money set aside for people with critical behavioral health needs and intellectual and developmental disabilities. Cuts and use of this funding received a good deal of scrutiny from the state auditor in 2019.
In a letter to lawmakers, Arendt listed the state’s mental health budget needs and priorities on behalf of more than 30 organizations that make up The Coalition on Mental Health, Intellectual and Developmental Disabilities, and Substance Use Disorders.
“As a collective voice, we are louder,” she said of the coalition, which has jointly advocated for the mental health needs of North Carolinians for several decades.
Headlining their list of 14 budget priorities is the need for lawmakers to restore the single stream funding.
The coalition also requests that the 5 percent Medicaid provider rate increase allowed by federal and state lawmakers in response to the COVID-19 pandemic be extended to providers working in mental health, IDD and substance use.
“[Our] providers are experiencing the same financial stress as hospitals, nursing homes, and primary care physician practices,” Arendt wrote to lawmakers.
“Clinics are competing for expensive PPE resources, implementing special COVID infection prevention measures for clients living in congregate settings, and struggling to keep their direct care workers employed and their patient or client populations out of hospital emergency rooms,” she said. “More support is needed so that current services do not have to end.”
Helping older North Carolinians
A raft of significant legislation for older North Carolinians also fell along the wayside in 2020. Their advocates are hoping to make up some of that lost ground in the wake of the pandemic, which proved so devastating to so many older people.
Heather Burkhardt, executive director of the North Carolina Coalition on Aging, said the pandemic “shed light on existing lack of funding, certainly for home- and community-based services for older adults to be able to get adequate care in their homes, and the support needed for family caregivers.”
A product of the Older Americans Act and state funding, Home and Community Care Block Grants are parceled out to counties for needs including senior centers, congregate meals, transportation, respite care, and adult protective services. A “waitlist” for the services has stood at 10,000 people for years, but the demand likely exceeds that level.
Among other services that will seek funding are Community Alternatives Program for Disabled Adults (CAP/DA) and Program for All-Inclusive Care for the Elderly (PACE).
Also missing the cut was a bill pushed by Rep. Donna White (R-Clayton) that would have created a task force to look at the growing number of caregivers in the state.
NC Adult Protective Services is required to work in each North Carolina county to make sure vulnerable people remain safe from physical, mental or financial abuse. Despite mandating the work, the state picks up only a small portion of the cost, with major support flowing from already strapped counties and the federal government.
“By 2025, 89 counties in North Carolina are projected to have more people aged 60 years of age than 17 years and under,” the independent North Carolina Senior Tar Heel Legislature said in its list of upcoming priorities. “Many of these adults may be at risk of becoming victims of abuse, neglect or exploitation.”
A provision that’s been ripe for change for many years almost crossed the finish line in 2019 that would have increased the Personal Needs Allowance, money which residents of skilled nursing and assisted living homes use to buy cigarettes, toiletries, transportation and many other needs not covered by long-term care funding.
Advocates hope the Personal Needs Allowance provision isn’t the only priority left over from the past two years that receives some long overdue attention during this legislative session.