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Lawmakers, Governor At Impasse Over State Budget; General Assembly Making Plans For Long Recess

Katherine Joyce | NCASA Executive Director

N.C. House efforts to override Governor Roy Cooper’s veto of the $24 billion state budget languished this week as the bill remained on the chamber’s floor calendar without action. Meanwhile, the Governor on Tuesday rolled out a compromise package showing his movement on some key areas of contention, except for his full Medicaid expansion proposal. However, GOP legislative leaders quickly discarded the proposal, saying any budget package with Medicaid expansion as an ultimatum is not a compromise. Lawmakers then took two main steps indicating they are preparing for an indefinite standoff on the state budget.

First, House budget chairs on Wednesday rolled out a stopgap spending measure in House Bill 111 covering 15 items that Senior Appropriations Co-Chair Donny Lambeth (R-Forsyth) called “absolutely vital” and "designed to be only the minimum."

The bill would utilize federal money for continuing certain programs requiring a state match, as well as maintain long-standing commitments that require new state funding. The bill includes $50.6 million to cover public school enrollment growth this fall, funding for the state university system's "NC Promise" tuition caps, language tweaks widening how disaster recovery money can be spent, and funding for criminal justice reforms passed two years ago in the "Raise the Age" push. It also clarifies that employer contribution rates paid for retirement, including those paid by LEAs, will remain at the June 30th rate in the absence of a new budget. H111 does not include raises for state or school employees, billions for new school construction, money to clear a testing backlog on rape kits, business tax cuts, or dozens of other changes embedded in the full state budget the GOP majority passed last month and vetoed by Governor Cooper.

H111 passed the full House 117-1 and heads now to the Senate, which has not yet signaled whether it supports the measure, nor if it will be taken up when that chamber comes back into session next week. It also remains unclear whether the Governor will sign or veto this bill if it reaches his desk, since doing so might weaken his leverage in negotiations on the full budget he is seeking.

A second sign that lawmakers are planning to leave Raleigh soon emerged in the State Senate on Wednesday. Senate Rules Chairman Bill Rabon (R-Brunswick) filed Senate Joint Resolution 688 that calls for the current session to adjourn on Monday, July 22, with a reconvened session to begin at noon on Tuesday, Aug. 27. Rabon's resolution does not set limitations on the topics that could be considered in the reconvened session in August. The House also has not yet indicated if it will go along with this proposed timeline for a long break in legislative action, so the dates for shutting down and returning still could change.

Given the apparent budget impasse and efforts by lawmakers to wrap up their work soon, state spending will continue at 2018-2019 levels under a state law that allows ongoing budget authority. While the law provides protection from a government shutdown, it does not provide any additional funding. This means schools could be left waiting weeks or months for needed funds, such as those for student enrollment growth, in the absence of a supplemental budget measure like the one rolled out this week in H111. The continuation authority also is limited to ongoing spending of recurring funds, so programs like school safety grants covered by one-time funding in 2018-19 cannot continue in the absence of a new budget, unless LEAs can direct local, federal or private resources to those needs.

The North Carolina Association of School Administrators (NCASA) is continuing to work with lawmakers and the Governor’s team to quickly produce the best possible budget for students and educators. Members can access a detailed budget comparison document, prepared by the Department of Public Instruction, by clicking here. We will continue to provide budget updates as needed on our website, weekly newsletter, and Twitter feed: @NCASAtweets.

Katherine Joyce