Pitching A "Bold Future," Cooper Unveils 2-year Budget Offer

Promoting what he calls North Carolina's "chance for a bold future," Gov. Roy Cooper on Wednesday formally unveiled his budget proposal, which includes expanding Medicaid, raising teacher pay, borrowing for school buildings and helping revive rural communities.

While the Democratic governor had put Medicaid expansion in his previous spending plans, this two-year budget likely marks his best chance yet to cover potentially 625,000 additional uninsured or underinsured residents through the federal health care overhaul.

That's because even though Republicans still control both chambers, Democrats have new-found leverage, having won additional General Assembly seats in November. Also, some House Republicans already support a modified expansion plan.

"We're ready to listen, talk and come to consensus," Cooper said at a news conference. "North Carolina needs to do this."

His state government spending proposal also would place a record $3.9 billion bond package on the November 2020 ballot, with most of the proceeds going to public education construction and improving aging local and regional water treatment systems.

Teacher pay would go up by 9.1 percent on average over two years, and over $140 million would go to help improve rural infrastructure to recruit commerce, build affordable housing and improve broadband access.

"If we set the right priorities, we can value our teachers, build schools for the future and expand Medicaid, all with no new taxes on the people of North Carolina," Cooper said.

The only tax increase he says he's pitching would extend an insurance premiums tax on Medicaid health care plans currently considered by the legislature that would cover the state's 10 percent portion of paying for Medicaid expansion.

Over 35 U.S. states have expanded Medicaid in this manner in some form, but North Carolina Republicans have thus far blocked expansion, reflecting their suspicions about the cost and larger federal government involvement in health care.

The top Republican budget-writers in the Senate dismissed the broader spending plan as "not a serious budget proposal," and suggested it "seems designed to cater to the governor's tax-and-spend base that put us in a hole ten years ago."

The size of the bond referendum is twice the amount that House Republicans have proposed. The Senate doesn't want any new debt, favoring a pay-as-you-go plan.

Cooper envisions overall spending at $25.2 billion for the year starting July 1, a 5.4 percent increase over this year's approved spending plan. Republicans have complained about what they considered bloated budgets in the past, too.

"The governor's insistence on spending as much taxpayer money as financially possible every year is the wrong approach," GOP Rep. Donny Lambeth of Forsyth County said in a news release.

But Republicans will have to negotiate with Cooper because GOP lawmakers can't override his vetoes alone after Democrats won 16 additional seats last fall.

Cooper wouldn't say directly whether he'd sign a budget only if it contains the Medicaid expansion, saying lawmakers may want to consider the initiative separately from the spending plan. But he suggested the topic could delay the traditional end date for this year's session. The House will propose a version of the budget, followed by the Senate. Then the two chambers will work out a final agreement that Cooper said he hopes he can sign.

"There are some issues that are critically important to our state and Medicaid is one of them," he said. "So we're going to have be here a long time to make sure that happens."

Cooper's rural revitalization initiative would set aside $15 million in grants to help economically distressed counties recruit businesses and $26 million for other rural infrastructure projects. He also pitched previous ideas to set aside some unemployment insurance tax revenues toward workforce development programs, including one that would help cover community college student tuition and fees in high-demand fields.

In addition to teacher pay increases, Cooper's plan would give state employees pay raises of $500 or 1.5 percent of their salaries — whichever is greater — in each of the two years. There would be additional $500 permanent pay increases next year for public school staff, correctional officers and other workers in state institutions.

Another $12 million would help improve prison safety and security, which has been emphasized since the deaths of five prison workers behind bars in 2017.