Cooper's rural-focused budget deserves serious negotation


Sunday, March 10, 2019

It’s a movie we’ve seen in Raleigh plenty of times before, no matter who’s in power. The governor presents a two-year budget plan that seeks to spend more than the previous year, increasing funding for education, infrastructure and other important needs. State House and Senate leaders immediately dismiss the plan and then write their own versions of a two-year state budget that increase spending a little for these vital needs, but never quite as much as the governor was seeking.

We realize this is the way the process is supposed to work: the legislative branch appropriates funding and the executive branch, meaning the governor, spends it. But we’d hope there’d be more of an effort at consensus this year, particularly since the proposal Gov. Roy Cooper put forward last week seeks to spend a lot more on real economic development for rural communities than’s been proposed recently.

Of course the largest boost for rural economic development in Cooper’s overall $25 billion-plus budget is something he’s proposed in previous spending plans but been denied by the Republican-led Legislature: expansion of Medicaid. Cooper is again asking lawmakers to allow North Carolina to join the 37 other states and the District of Columbia that have agreed to extend coverage under the federal health insurance program to their working poor and low-income residents. Expanding Medicaid coverage under the Affordable Care Act requires states to pay 10 percent of the cost while the federal government picks up the remaining 90 percent. 

Expanding Medicaid would be a huge shot in the arm for health care in North Carolina, particularly in rural communities like ours. First of all, Medicaid expansion would extend health coverage to an estimated 625,000 people who, because they’re either uninsured or underinsured, get their primary care in costly emergency rooms instead of a doctor’s office. Because these patients are unable to afford the cost of their care, hospitals like Sentara Albemarle Medical Center in Elizabeth City and Vidant Chowan in Edenton have to write off a lot of what they owe.

To make up for these losses, hospitals engage in “cost shifting,” charging patients with private insurance more for their health care. Expanding Medicaid so that more people qualified for the coverage could put a stop to cost shifting and end this “hidden tax” on all North Carolinians, as Vidant Health CEO Michael Waldrum so ably described it during a recent visit to Edenton. Expanding Medicaid also would boost economic development in rural communities because it would lead to the creation of thousands of needed new jobs in health care without strangling providers with the costs.

Unfortunately GOP lawmakers, including state Sen. Bob Steinburg, R-Chowan, continue to mouth the same old tired objections to Medicaid expansion, claiming that the 90 percent federal participation rate isn’t guaranteed long term and ultimately will end up sticking North Carolina with the bill. While this might have been a valid concern eight or nine years ago after the ACA was first passed, it no longer is. For proof, just look at the other states that expanded the program since then, some by voter referendum. North Carolina is now among a minority of 14 states, mostly in the South and lower Midwest, that haven’t expanded Medicaid to cover their low-income and working-poor residents.

While state Republicans’ backward-looking objections might have spelled doom for Medicaid expansion in the past, there’s hope that the change in the balance of power brought about by last year’s legislative elections will change its prospects this year. Republicans no longer hold veto-proof majorities in either the House or Senate. As a consequence, they’ll have to negotiate with Cooper and legislative Democrats to get any type of budget passed. That can only be a good thing.

The shift in the balance of power also means there’ll be real negotiations about other parts of Cooper’s budget proposal as well. The plan includes a record $3.9 billion bond proposal, with most of the proceeds going for school construction. Among the beneficiaries, should voters approve it in 2020, are Elizabeth City State University, which would get $28.8 million to build a new library; College of The Albemarle, which would get $6.05 million, more than half of which would go toward the cost of either expanding a health sciences building or building a new one; and all area K-12 school districts. Under the plan, Elizabeth City-Pasquotank Public Schools would get $14.9 million, Camden County Schools would get $11.3 million, Currituck County Schools would get $12.1 million and Edenton-Chowan Schools and Perquimans County Schools would get $11.4 million and $10.9 million, respectively. Cooper’s bond proposal is nearly twice that of the state House’s, which would provide at least $10 million each to area school districts. It also won’t require districts to compete for funding, as the Senate’s proposal to make more construction funding available to schools does.   

What’s more, Cooper’s budget proposal specifically targets rural communities by spending more than $140 million on improving infrastructure and providing more access to affordable housing and broadband internet in areas without it. It also proposes spending $80 million in rural communities on what Cooper calls “transformational” projects. These projects include almost $15 million on the Marine Industrial Park in Perquimans County; $1 million in Elizabeth City to help the city purchase the former Elizabeth City Shipyard property; and $66,000 to help Edenton continue improvements to the Taylor Theater in the town’s downtown.

We don’t expect lawmakers to adopt Cooper’s budget whole hog. We do expect them, however, to seriously negotiate so that the final budget includes a substantial bond package for school construction and funding for these transformational projects. The movie script we referred to above needs to change.