In Spending Stalemate, NC Republicans Advance 'Mini-Budgets'

Frustrated by a two-month budget impasse, North Carolina Republicans advanced on Tuesday narrowed tax and spending legislation that could take away some bargaining chips from Democratic Gov. Roy Cooper.

The House and Senate debated and voted on several bills that would increase pay for state employees and law enforcement officers, as well as for local school workers like custodians and other non-instructors. Other legislation would give one-time refunds to everyone who owed state income tax last year, with some couples getting $250, thanks to a large revenue surplus.

Everything except the tax rebate bill originates almost exactly from the two-year budget measure Cooper vetoed June 28 because it lacked Medicaid expansion and generous teacher raises.

House Republicans, whose majority is no longer veto-proof, have been unable to entice enough Democrats to vote for an override. This failure — along with Cooper's emphasis on getting Medicaid expansion approved and the GOP's current opposition to the idea — has led to idled negotiations for several weeks.

So legislative leaders revealed last week their plans to essentially approve "mini-budgets" full of pay raises and the tax break, then essentially daring Cooper to veto the bills when they reach his desk.

"I would not have anticipated (Cooper) being so bull-headed about having Medicaid expansion, knowing that it's an issue that doesn't have consensus," said Rep. Jason Saine, a Lincoln County Republican and a senior budget-writer. "But nevertheless, that's the pathway that he's chosen to move forward, and if he chooses to veto pay raises, that's on the governor."

Cooper planned to address the budget impasse in a news conference later Tuesday. The governor has rejected repeatedly Republican arguments that he has a "Medicaid or nothing" ultimatum for budget talks to advance. But he's said expansion to cover hundreds of thousands of additional people through Medicaid needs to be talked about now.

Cooper made a budget compromise offer last month, but Republicans haven't publicly responded with a counteroffer.

"When you put an offer on the table, if you're really sincere in wanting to negotiate, you make a counteroffer," Cooper told reporters last week. "If you don't like what I put on the table, then tell me what you will take."

The bills moving this week represents a GOP strategy to move along popular priorities that stand less risk for vetoes and greater likelihood of an override.

The mini-budget bills, which largely cut and paste items from the vetoed two-year budget, would:

— give 2.5% pay raises annually to rank-and-file state employees and state law enforcement for the next two years, with bonus and incentives for correctional officers working in hard-to-staff prisons or are moved to higher-security prisons.

— give 1% raises this year to non-certified local school personnel.

— provide cost-of-living bonuses in 2019 and 2020 to state retirees equal to 0.5% of their annual pensions.

— complete the final funding and make more changes so the state Medicaid system can switch later this year from a fee-for-service program to a managed-care program. Conventional insurers and a physician partnership will soon be treating up to 1.6 million Medicaid recipients. The "prepaid health plan" doesn't address expansion through the 2010 Medicaid health care law, which Cooper is seeking.

Republicans have not yet rolled out a bill to address public school teacher raises. Saine said one will come out at a later date. The GOP budget offered an average 3.8% pay raise for teachers over two years. Cooper's latest offer would provide 8.5% average raises over the same time.