by Brenée Goforth
Communications Associate, John Locke Foundation
North Carolina’s budget standoff has been receiving national attention, and the John Locke Foundation has been the resident-expert on this debate for many of those trying to make sense of it all. Most recently, Forbes contributor Patrick Gleason utilized comments from JLF’s Becki Gray when writing his most recent commentary on the issue. Gleason writes:
It’s unclear how this budget standoff will play out in the coming days. What is clear is that Governor Cooper and his allies have been dead wrong about budget predictions in the past. Only two years ago Democrats and progressives in North Carolina were warning that the round of tax relief enacted by Senator Berger, Speaker Tim Moore and other legislative Republicans at the time was going to create a budget shortfall of $1.4 billion by 2019.
Well it’s now 2019 and not only is there no budget shortfall; there is another budget surplus in North Carolina.
Gleason quotes JLFs Becki Gray in explaining how this is a major success:
“By restraining spending growth to an average of 3.5% over the two-year budget (within the growth of population and inflation) North Carolinians get to keep more of their money and enjoy the freedom to spend it as they wish,” writes Becki Gray, senior vice president at the John Locke Foundation, about the budget approved by the General Assembly and vetoed by Governor Cooper. In addition to keeping the rate of growth in state spending on a sustainable trajectory, Gray applauds the way the budget passed by the General Assembly replenishes the state’s rainy day fund.
“Putting $710 million into the savings reserve account and building the state’s rainy-day fund back up to $1.96 billion by 2021 ensures help when we need it most — during a natural disaster or to get us through an economic downturn, as well as providing peace of mind and freedom from worry.”
Ironically, it is Gov. Cooper’s Medicaid expansion efforts which are more likely to create a budget shortfall, as Gleason cites:
Implementing Obamacare’s Medicaid expansion in North Carolina, which is Governor Cooper’s top priority, would cost $6 billion over the next two years, which represents a 28% percent increase in Medicaid spending and a roughly 8% increase in total state spending.
Among the 37 states that have expanded Medicaid in accordance with Obamacare, cautionary tales about its affordability abound… [In Ohio,] only eighteen months after the Kasich-backed expansion took effect, Ohio’s Medicaid program was $1.5 billion over budget.
This has many people hoping North Carolina goes the way of Wisconsin, Gleason writes:
As is the case in North Carolina, in Wisconsin a Democratic Governor, Tony Evers, wants to impose Obamacare’s Medicaid expansion, a proposal that is opposed by his GOP-controlled state legislature. Last week Governor Evers used his line item veto authority to finalize a new state budget that adopts the tax relief included in the budget approved by Republican legislators, while giving up on his push, for the time being, to implement Obamacare’s Medicaid expansion in the Badger State.
Many see a similar conclusion to the budget standoff in Raleigh, in which Governor Cooper agrees to the tax relief in the General Assembly-approved budget and drops his push for Medicaid expansion, as a win for North Carolina taxpayers.