FOR IMMEDIATE RELEASE: June 27, 2019
Contact: Joseph Coletti
John Locke Foundation
Legislative Budget Plan Wisely Avoids New Debt
and Medicaid Expansion
JLF analyst highlights key features in House, Senate compromise
RALEIGH — What’s not included in the North Carolina House and Senate budget compromise is just as important as what is, according to the John Locke Foundation’s top budget analyst.
“No new debt means the plan does not burden future taxpayers with today’s construction costs even as paying down debt frees more money to take care of obligations for retired state employees,” said Joseph Coletti of the $24 billion General Fund budget that resulted from a compromise between House and Senate negotiators. “And no Medicaid expansion means more opportunity to improve health care access for all North Carolinians.”
Gov. Roy Cooper has signaled he will veto the budget if it does not include Medicaid expansion. That means there may not be a new operating budget in place when the new budget year begins July 1.
Regardless of the uncertainty, Coletti emphasized that, due to state law that prevents a shutdown, there isn’t a crisis. He urged decision-makers not to feel pressured to accept just any spending deal. “North Carolina government will continue to operate. People still will be able to get their driver’s or fishing licenses. Parks and historical sites will remain open.”
If the July 1 deadline isn’t met, current budget provisions would continue into the new budget year. “It is anyone’s guess what would come next, but there would be no need for continuing resolutions or desperate actions,” Coletti said. “Evidence suggests the outcome will be more fiscally sustainable than if there were a government shutdown.”
Key Takeaways From the House and Senate Budget Compromise
1. This budget contains no new debt and no Medicaid expansion, two important policy decisions that will protect taxpayers into the future.
2. Compensation for past and present state employees, including teachers and principals, accounts for $213 million of the additional expenditures in the compromise budget.
3. The other significant increases across all budget proposals would keep youth under 17 in the juvenile justice system and ensure Medicaid can pay for promised health benefits as it transitions from a system that pays for each individual service to one that pays private insurance companies to manage the care of beneficiaries.