North Carolina deserves a functional General Assembly

As North Carolina enters the second quarter of its fiscal year, it remains one of just two states in the nation without a comprehensive budget bill.

Recent reports indicate there is no appetite among legislative leaders to return to Raleigh the rest of this calendar year, leaving the budget and several other important issues unaddressed.

 Let’s face it: The General Assembly has become dysfunctional.

With Republican majorities in both chambers, failure to reach a budget agreement is embarrassing — and, worse, it impacts millions of North Carolinians.

While the state has a continuing resolution that keeps spending at last year’s levels to avoid a shutdown scenario, the uncertainty wreaks havoc on state agencies.

The lack of a budget prevents local education agencies that run K-12 schools from creating concrete financial plans. On average, state funding comprises about 60-65% of a district’s budget. Districts don’t know how much money they will have for student enrollment, teachers, school staff, additional staff, or salary and benefit changes. It obviously places districts in very difficult situations when planning for the future.

One can simultaneously be critical of how public schools are run and also sympathize with the difficulties and frustrations the absence of a budget creates.

Similar frustrations are experienced in state agencies ranging from the UNC System to the Department of Justice and Public Safety.

Arguably, the biggest sticking point between the two chambers’ budget plans is their treatment of personal income tax rates. The Senate looks to maintain, and even accelerate, the income tax rate reductions already scheduled for the next few years. Meanwhile, the House plan would make those scheduled rate reductions nearly impossible. Failure to pass a budget, therefore, impacts millions of North Carolina taxpayers.

Other significant policies are impacted as well. Foremost among them are North Carolina’s archaic Certificate of Need (CON) laws. The Senate plan would repeal these laws, while the House plan remains silent about them. CON laws have a significant, negative impact on the availability and affordability of medical care for North Carolinians.

What to do with the half a billion taxpayer dollars given to the controversial NCInnovation program is also on hold due to the lack of a budget.

Unfortunately, lengthy delays in getting a budget to the governor’s desk have become the norm in recent years. A recent analysis by John Locke Foundation fiscal policy analyst Joe Harris found that of the last three biennial budget plans, the earliest approval by the legislature came on Sept. 22, nearly three full months into the fiscal year.

Making things more frustrating still is that the differences between the two chambers’ budgets could have easily been reconciled had they merely agreed upon modestly slowing the growth rate of spending.

The state budget impasse is, unfortunately, not the only issue demonstrating dysfunction on Jones Street. Every year, the legislature includes additional spending for a Medicaid “rebase,” to account for estimated increases in enrollment and costs. To their credit, the legislature passed a bill in August appropriating about $500 million toward the rebase (with around $100 million more for administrative costs).

The problem, however, is that the amount still falls about $319 million short of the estimate provided by NCDHHS.

Several bills were filed in both the House and Senate to fund much, or all, of that remaining amount. But these bills stalled in a fit of finger-pointing, with each chamber accusing the other of misunderstanding or violating the mutually agreed-upon adjournment resolution.

Who’s right? I don’t care. Just do the job.

Now the legislature has left town, apparently with no intention of addressing this issue until 2026.

I was quick to criticize Gov. Josh Stein’s decision to cut Medicaid reimbursement rates on Oct. 1, calling it premature in light of the hundreds of millions already approved for the rebase. The legislature’s inability to reach an agreement that fully funds the estimated rebase, however, provides justification for Stein’s decision.

One thing the legislature did accomplish with great haste was to redraw the state’s congressional map, with the stated intent of creating an additional Republican seat. Leaders, including Senate President Pro Tem Phil Berger, explicitly stated that this move was “to protect President Trump’s agenda, which means safeguarding Republican control of Congress.” The new maps are expected to increase Republican representation from 10 to 11 of the 14 state congressional seats.

It’s striking how quickly legislative leaders were able to come to agreement when motivated by shoring up their own political power.

John Locke Foundation board member John Hood recently called this map redraw a “terrible idea” that sets a dangerous precedent that could readily be used against Republicans in the not-too-distant future.

Finger-pointing, childish blame-shifting, and refusing to accomplish the fundamental task of passing a budget are what have characterized this year’s legislative session. Voters deserve better.

“North Carolina deserves a functional General Assembly” was originally published on www.carolinajournal.com.