North Carolina General Assembly Week in Review

March 31, 2023

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Medicaid Expansion

Although states began expanding Medicaid under the Affordable Care Act over a decade ago, this week, North Carolina became the 40th state to do so. Democratic Governor Roy Cooper signed HB 76: Access to Healthcare Options into law Tuesday, surrounded by both Republicans and Democrats from the General Assembly who heralded its passage. The law will allow for an estimated 600,000 more people, many of whom have jobs that do not provide health insurance and do not make enough to afford private insurance, to have access to Medicaid coverage. Healthcare advocacy groups, including physicians, nurses, hospitals, and insurers, supported the expansion efforts.

Medicaid expansion will not go into effect immediately, though. One thing still stands in the way: the passage of the state budget. Legislative leadership tied the expansion provisions in the bill to the passage of the state budget weeks ago. “I think what’s important about this is that we have agreed on how to expand Medicaid, and it’s only a question of when and not if,” said Governor Cooper.

Even with implementation of Medicaid expansion tied to the state budget, many are thrilled at its long-awaited passage. “With this bill, more uninsured North Carolinians can avoid financial ruin from unpaid medical bills. More rural hospitals will be able to stay open, with their jobs, businesses won’t lose as many good workers to illness or to care for a sick family member. Insured people can pay lower premiums because there will be fewer uninsured people who can’t pay. And people will have access to more doctors, nurses, and mental health professionals because there will be more people who can pay them. It’s clear that this legislation I’m signing today will have a positive effect for all working families, even if they don’t directly get Medicaid,” said Governor Cooper during the bill signing ceremony.

House Budget Proposal

North Carolina House leaders released a proposed state budget this week, over a month earlier than they have in the past decade. The proposal, HB 259: 2023 Appropriations Act, would increase state spending by 6.5% during the 2023-2024 fiscal year, to $29.7 billion, and then by another 3.75% in the second fiscal year of the biennium, to $30.8 billion. House members moved on the bill quickly, with appropriations subcommittees and the full House Appropriations Committee both approving the measure Thursday, a day after the document was released publicly.

The budget proposal includes significant salary increases for state employees, with teachers and other educators receiving an average 10.2% pay raise over the biennium, and other state workers receiving an average of 7.5%. State agencies will also receive additional funds to provide raises or sign on bonuses as they see fit, to assist with retention and recruitment issues. In addition to the pay raises, the budget also includes a provision for $1.5 billion in capital funding for public schools, with a focus on building new schools and renovating existing facilities. The budget proposal also includes funding to hire more school nurses, counselors, and psychologists.

Although Medicaid expansion passed the legislature and was signed by Governor Cooper earlier this week, the bill did not fund expansion. Instead, the budget proposal would fund the components of the expansion bill. This means that the budget includes funding to provide health insurance to more low-income North Carolinians.

House Republicans are building on their commitment to lower income taxes for North Carolinians. The 2021 state budget dropped the state’s personal income tax from it’s current 4.99% to 3.99% by 2027. This budget proposal speeds up the reduction, to reduce the individual income tax rate to 4.5% in 2024, which is a year earlier than planned. The child tax credit would also be increased by 20%.

One controversial provision of the budget proposal is a prohibition on the Advanced Clean Truck rule, which would require manufacturers to sell a certain percentage of zero-emission commercial trucks. Governor Cooper has embraced the rule, which has been adopted by six other states, and urged the Department of Environmental Quality to begin the rule making process to require truck manufacturers to sell a certain number of zero-emission vehicles in the state. When asked about the provision during committee Thursday, Representative Dean Arp (R-Union), who is a budget and energy policy leader, said “it prevents this state from going down a failed energy policy that raises rates and reduces reliability.”

The budget proposal includes several policy changes affecting the State Bureau of Investigation (SBI). The bill would make the SBI an independent cabinet-level agency that would be transferred out of the jurisdiction of Democratic Attorney General Josh Stein.

In the proposal is also an extra $1 billion for transportation projects, and another $1 billion for water and sewer infrastructure projects. Additionally, $400 million is allocated to economic development work, with most of the funds aimed at developing mega site properties around the state. Mega sites are designed to attract large companies, usually manufacturers, to turn-key tracts with accommodating infrastructure.

Finally, the budget proposal includes several changes affecting how charter schools are approved in the state. The bill would take away the State Board of Education’s power to approve or deny, or to renew, charter school applications. The measure would transfer the approval power over charter schools to the Charter Schools Advisory Board, which is made up of members appointed by the Republican-led General Assembly. Currently, most of the State Board of Education is made up of members appointed by Governor Cooper. Another proposed provision would extend the pilot for the state’s two existing virtual charter schools so they can continue operating through the 2025-2026 school year and increase their enrollment.

The budget proposal sets aside between $1.8-to-$3.5 billion for additional projects. At the conclusion of House session Wednesday, Speaker Tim Moore (R-Cleveland) told members that a portion of the reserve funds would be for additional projects that would be negotiated with the Senate during conference. The House’s budget proposal will likely move through the chamber next week and be sent to the Senate. Senate lawmakers will then draft their own version of the state budget. Negotiations between the two chambers are expected to occur during the month of May, with passage of a budget expected in late May or early June.

Sports Wagering

Nearly one year after a bill to allow mobile sports betting in North Carolina was defeated in the House by one vote, HB 347: Sports Wagering, passed the House this week with a 64-45 vote. HB 347 would allow for North Carolina residents to gamble on college and professional sports on their mobile devices. Representative Jason Saine (R-Lincoln), one of the bill’s primary sponsors, said “The overwhelming majority of people view sports betting as a form of entertainment that consenting adults should have the right to do.” Many supporters view the bill as a great chance for North Carolina to increase its revenue through its proposed 14% tax rate, which is higher than the average of other states tax rates.

Those who opposed the bill stated that this bill and the advertising that goes along with it will create more gambling addictions throughout the state. “The argument has been made that we’re missing out on revenue from folks who are already gambling. We don’t need to make more gamblers,” said Representative Tim Longest (D-Wake).

Seeking to either increase the revenue generated from sports wagering, restrict advertising, or prohibit certain sports from being betted on, House lawmakers proposed 17 total amendments on the House floor, all of which were defeated. The bill passed the full House Wednesday in a bipartisan vote of 64 to 45, with members of both parties voting in opposition and in favor. The bill now moves to the Senate which is expected to pass it. If enacted in its current form, the bill would become effective on January 8, 2024, which is also the scheduled date of the next College Football Playoff Championship.

Veto Override

This week, North Carolina’s pistol purchase permit system was officially repealed after the state legislature overrode Governor Roy Cooper’s veto of SB 41: Guarantee 2nd Amend Freedom and Protections. The successful override is the first since 2018 when Republicans last had a supermajority in the legislature. The pistol purchase permit law, which was first established in 1919, required individuals to obtain a permit from their local sheriff before purchasing a handgun, with the intention of keeping guns out of the hands of people with criminal records or mental health issues. However, supporters of the repeal argued that the system was redundant because a background check is still required during the federally mandated purchase process.

The repeal has drawn both criticism and praise. Supporters argue that it eliminates an unnecessary barrier to legal gun ownership and preserves Second Amendment rights, while opponents argue that it weakens public safety measures and makes it easier for dangerous individuals to obtain firearms. The change took effect immediately when the House overrode the veto Wednesday morning in a party-line vote of 71 to 46. Three Democrats, Representatives Cecil Brockman (Guilford), Tricia Cotham (Mecklenburg), and Michael Wray (Halifax) were absent from the vote.

Republican State Senator Danny Britt Jr. (Robeson), who sponsored the bill, spoke on the Senate floor prior to the chamber’s vote to override the governor’s veto, stating that “We’re doing the right thing by removing an unnecessary obstacle to legal gun ownership, and preserving the Second Amendment rights of North Carolinians.” Democratic State Senator Natalie Murdock (Durham), who voted against the bill, stated that “This repeal is a step in the wrong direction for our state. We need to be strengthening our gun laws, not weakening them.” Similarly, Democratic Governor Roy Cooper, who vetoed the bill, argued in his veto message that “The pistol purchase permit system is a valuable tool for keeping guns out of the hands of people who shouldn’t have them, and repealing it would endanger public safety.”

Upcoming Legislative Meetings

Monday, April 3

11:00 AM House: Session
4:00 PM Senate: Session

Tuesday, April 4

10:00 AM House: Local Government
10:00 AM House: Health
1:00 PM Senate: Commerce and Insurance
2:00 PM Senate: Finance
3:00 PM House: Judiciary 3
3:00 PM House: Commerce

Wednesday, April 5

10:00 AM House: Judiciary 2
10:00 AM House: Transportation
12:00 PM Senate: Transportation

Thursday, April 6

10:00 AM House: State Personnel