North Carolina General Assembly Week in Review

North Carolina News Roundup

This week, Democratic Governor Roy Cooper appointed Todd Ishee to lead the newly created Department of Adult Correction. The General Assembly created the stand-alone cabinet agency during their 2021 session. Ishee most recently served as the North Carolina Commissioner of Prisons within the Department of Public Safety.

The White House announced this week that Ronnie Chatterji of Durham will manage the $52 billion rollout of the federal CHIPS Act. Chatterji was named the White House Coordinator for CHIPS Implementation at the National Economic Council. Chatterji previously worked as a senior economist under President Obama and in 2020 Chatterji ran unsuccessfully for North Carolina State Treasurer.

In response to questionnaires by the New York Times and the Washington Post published Sunday, current North Carolina U.S. House of Representatives member and Republican nominee for U.S. Senate from North Carolina, Ted Budd, declined to say whether he would accept the election results of his race against Democratic candidate Cheri Beasley. After receiving public pushback, Budd implied at a news conference Tuesday that he would accept the results, saying, “I mean, why wouldn’t I?”

Senate President Pro Tempore Phil Berger (R-Rockingham) told reporters Tuesday that his chamber will not forgive state taxes on student loan forgiveness, following President Biden’s announcement last month to forgive up to $10,000 in student loans. In late August, the North Carolina Department of Revenue announced that while borrowers will be exempt from paying federal taxes on those forgiven loans, the same does not apply to state taxes.

Disaster Recovery Oversight Committee

A new bipartisan legislative subcommittee tasked with overseeing delays associated with disaster relief held its first hearing last week. The date was symbolic: the four-year anniversary of when Hurricane Florence made landfall in North Carolina. Since both Florence and Hurricane Matthew devastated communities and displaced thousands of homeowners in southeastern North Carolina, the state agency responsible for coordinating relief efforts, the North Carolina Office of Recovery and Resiliency (NCORR) has been criticized for taking so many years to get people back into their homes.

The General Assembly created NCORR in 2018 and housed the agency within the Department of Public Safety (DPS). The agency was created, in part, to distribute hundreds of millions of dollars in federal recovery funds. Federal guidelines require the funds to be distributed by mid-2026, but agency leaders claimed last week that only 60%, or $231 million, of funds have been committed so far. The funds are meant to provide temporary housing for displaced residents and compensate contractors for rehabilitating or reconstructing housing units. Of the nearly 4,200 Homeowner Recovery Applicants that have been filed since Hurricane Matthew hit in 2016, only 800 projects have been completed. Last week, legislators spent nearly six hours questioning both agency leaders and displaced homeowners to learn about the reasons for the delay.

Laura Hogshead, who is the director of NCORR, told lawmakers those additional applicants are waiting to find contractors willing to take on the government-funded projects. Displaced homeowners testified to the committee that they had been living in rental properties or motels since submitting their application, with some having lived in these temporary conditions for over two years. Committee co-chair Rep. John Bell (R-Wayne), whose district was severely impacted by the storms, told Hogshead that he and others on the committee heard frequently from contractors who refused to do more work for the state because they had not yet been paid for work completed several years prior due to missing paperwork.

Lawmakers expressed disappointment in the office’s mismanagement. Sen. Brent Jackson (R-Sampson) who also co-chairs the committee, told Hogshead, “We’re in a hole so deep that, quite frankly, I don’t think you or your staff can dig yourself out of it…You would need a 600% increase in output to meet the [2026] deadline, right?” Hogshead responded with a “yes.” Hogshead admitted the efforts to streamline recovery programming were off course, and she took responsibility, pledging to committee members that she would “try [her] best” to get the remaining individuals in temporary housing back into their homes by Christmas.

The subcommittee will meet again on December 14 to receive a status update from NCORR.

Medicaid Expansion

Last Friday, the North Carolina Hospital Association (NCHA) proposed a potential compromise for the ongoing debate between the House and Senate surrounding Medicaid expansion. Earlier this year, the Senate, led by Senate President Pro Tempore Phil Berger (R-Rockingham), passed HB 149 Expanding Access to Healthcare to expand Medicaid and adopt other health-related policy reforms. One policy reform included in the Senate’s proposal, which was a sticking point among House legislators, was the overhaul of the state’s certificate of need (CON) laws. Hospitals claim that significant changes to the CON laws could “threaten the survival of community hospitals” and cut into hospital revenue, according to a statement by Dr. Roxie Wells, the NCHA Board Chair. The NCHA’s proposal backs changes for certificates of need on ambulatory surgical centers and an end to the certificates for inpatient space for psychiatric and chemical-dependency patients

However, the proposal fell flat with Senator Berger, who said in an interview that while he was happy the NCHA was coming to the negotiating table, the proposal “looked to me like it was more to do with public relations than a substantive or a serious proposal to get something worked out.” Additionally, Senator Berger told reporters this week that he does not think the General Assembly will address Medicaid expansion during the administrative session currently scheduled for December. House Speaker Tim Moore (R-Cleveland) has said in previous months that it is possible the legislature could revisit Medicaid expansion in December if a compromise can be reached.

Democratic Governor Roy Cooper, who has campaigned on Medicaid expansion since his first election in 2016, told reporters last week that he would prefer to pass expansion as-is and then revisit the other healthcare policy reforms. However, Cooper also noted that Senator Berger wants other medical reforms, and said those reforms “have merit’ and “should be discussed.”