The good and the bad of the new state budget

There are some good things in the state’s new $30 billion budget. And there’s plenty of bad Gov. Roy Cooper had to accept to win Medicaid expansion.

“Make no mistake, overall this is a bad budget that seriously shortchanges our schools, prioritizes power grabs, keeps shady backroom deals secret and blatantly violates the constitution, and many of its provisions will face legal action,” Cooper said as he explained why he let the budget become law without his signature.

“Health insurance for 600,000 more North Carolinians that brings more mental health and substance use disorder treatment, help for desperate rural hospitals and billions of dollars into our economy is a life-saving, monumental decision for our state,” Cooper said.¹

Here’s what Cooper had to accept – good and bad – to win that coverage:

THE BAD

Voucher expansion: The single worst thing in the new budget is a vast expansion of Opportunity Scholarships – vouchers to attend K-12 private schools – from $95 million in 2022-23 to $520 million by 2032-33, which will very likely divert funds from public schools. The budget removes income limits on these subsidies to private schools, so even a student already in private school will receive tax dollars to attend.² Rep. Brandon Lofton, D-Mecklenburg, observed that legislators could double raises for public school teachers with the money devoted to vouchers.³

K-12 teacher raises: Public school teachers will see an average raise of 7% over two years: 4% the first year, 3% the second. In a state that started the school year with 3,500 teacher vacancies, that’s not nearly enough to help teachers catch up with three years of inflation and refill the leaky teacher pipeline. Legislative “leaders” boast that starting teachers will receive a 10.8% increase over two years. But North Carolina started the year ranked 46^th in starting teacher pay, and the $39,000 starting pay they brag about is $4,000 less than Alabama approved last year.⁴ We can and should do better – North Carolina ranks 50^th for its funding effort in public education.⁵ At a time North Carolina has a budget surplus of $4.8 billion,⁶ that’s pitiful.

Community College Governance: As part of a move that began in 2016 to dramatically shift appointment powers from the Governor to the General Assembly, the Governor will lose all 10 of his appointments to the State Board of Community Colleges. The legislature will now have 18. Legislators will also confirm the next Community College System President. The Governor will also lose four appointments to boards at each of the state’s 58 community colleges. Each board will now have eight trustees appointed by the General Assembly and four by county commissioners.⁷ A separate bill added two trustees to be appointed by legislators, of course, to further politicize the boards of trustees at UNC Chapel Hill and NC State.⁸

NC Education Campus: The legislature ordered the UNC System Office to move from Chapel Hill to Raleigh – across the street from the Legislative Building – and consolidate office space with the Department of Public Instruction, Community College System and Department of Commerce. The move is unnecessary – all for the sake of political control – and a needless cost to taxpayers that has now ballooned to more than $400 million: $10 million for demolition, $65 million for parking, $320 million for a new building,⁹ plus at least $15 million in rent for temporary UNC System offices in Raleigh.

School of Civic Life and Leadership: Politicians dictating curriculum – what could go wrong? In a rebuke to UNC Chapel Hill faculty who have the expertise to develop course offerings, the budget circumvents that process to establish a school UNC trustees decided to start. In rhetoric infused with ideology, trustees told Fox News it is intended to counter “left-of-center progressive views on campus.”¹⁰ Though the university has already named an interim dean and initial faculty,¹¹ the budget directs the university to hire 10-20 faculty members from outside UNC Chapel Hill and orders the Provost, rather than the Chancellor, to name a dean by Dec. 31.¹² It also provides $2 million a year for the school’s first two years.

THE GOOD

Medicaid expansion: After denying health care to their fellow man for a decade, legislators finally agreed to expand Medicaid health insurance for 600,000 North Carolinians who make too much (because they work) to qualify for Medicaid, but not enough to buy private insurance. During the years since legislators first could have approved Medicaid expansion in 2014, seven rural hospitals have closed in North Carolina.¹³ North Carolina has been pitifully slow with this.

Rural health care: The budget devotes $420 million to a joint effort by UNC Health and ECU Health called NC Care that would use $210 million for three health clinics in Eastern North Carolina, $150 million for investments in hospitals, $50 million for a regional behavioral health hospital, and $10 million to create an integrated care network.¹⁴

Nursing instructor pay: North Carolina has a severe shortage of nurses. It is largely a shortage of instructors who can make more being a nurse than they can teaching how to nurse.¹⁵ It took several years, but legislators finally recognized the need and raised pay for nursing instructors at both community colleges and state universities by 10% in starting pay and as much as 15% for other instructors.¹⁶

NCInnovation? This allocation of $500 million over two years, rather than the Senate’s initial audacious proposal of $1.4 billion, to a nonprofit headed by former Truist CEO Kelly King still raises skeptical eyebrows. But it could be a good thing if it is transparent and makes good investments to build research capacity. The group proposes to commercialize research at UNC System institutions – its board includes representatives from N.C. A&T, East Carolina, Western Carolina and UNC Charlotte, plus UNC System President Peter Hans. The budget includes community colleges in its definition of higher education research institutions. The General Assembly will appoint eight of its 13 board members.¹⁷

UNC Health Children’s Hospital: $320 million for UNC Health to build a new Children’s Hospital in the Triangle that will include a behavioral health hospital.¹⁸

UNC Faculty Retirement Incentive: Salaries are the UNC System’s biggest expense. Legislators granted System officials’ request for $16.8 million to offer tenured faculty a year’s salary as a retirement incentive. Priority would go to professors at universities that have seen enrollment shrink: NC Central, UNC Asheville, UNC Greensboro, Winston-Salem State and East Carolina.¹⁹

Teaching Fellows Expansion: The NC Teaching Fellows provided scholarships for 8,500 aspiring teachers until 2015, when Republican legislators ended the program. It was resurrected two years later as forgivable loans for teachers in STEM fields and special education. The new budget increases the number of universities from eight to 10, increases loans to $5,000 a semester and expands the fields of study to include aspiring K-6 teachers.

Free school meals: As many as 25,000 low-income students pay out of pocket for reduced-price meals. The budget provides $6 million to cover those costs and reduce the stigma. It also encourages schools to join a federal program that provides universal free meals in schools.²⁰

Despite some positive elements, if ever a budget demonstrated underfunding of public education, promotion of private education and a shift in power to the legislative branch of government, it’s this budget. We are No. 1 for our business climate, but slipping further behind in public education.

That can’t be sustained.

¹ https://governor.nc.gov/news/press-releases/2023/09/22/gov-cooper-statement-passage-state-budget-and-medicaid-expansion.
² https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H259v7.pdf, pp. 187-197.
³ https://www.wral.com/story/brandon-lofton-state-budget-without-public-input-or-meaningful-negotiation/21060971/.
⁴ https://www.higheredworks.org/2023/09/7-over-two-years-simply-not-enough/.
⁵ https://edlawcenter.org/assets/files/pdfs/publications/Making-the-Grade-2022-Report.pdf, pp. 19-20.
⁶ https://webservices.ncleg.gov/ViewNewsFile/81/CommitteeReport_2023_09_20_Final, p. 7/A1.
⁷ https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H259v7.pdf, pp. 71-78.
⁸ https://ncnewsline.com/2023/08/17/new-legislation-expands-unc-chapel-hill-and-nc-state-boards-of-trustees/; https://www.ncleg.gov/Sessions/2023/Bills/Senate/PDF/S512v5.pdf.
⁹ https://webservices.ncleg.gov/ViewNewsFile/81/CommitteeReport_2023_09_20_Final, p. 694/H7;https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H259v7.pdf, pp. 586, 589.
¹⁰ https://www.foxnews.com/video/6319418361112.
¹¹ https://ncnewsline.com/briefs/initial-faculty-for-controversial-new-school-announced-at-unc-chapel-hill/; https://www.newsobserver.com/news/local/education/article280300489.html.
¹² https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H259v7.pdf, pp. 161-162.
¹³ https://www.wral.com/story/devastating-for-our-rural-communities-gov-cooper-highlights-hospital-closures-as-legislature-delays-on-state-budget/21000120/.
¹⁴ https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H259v7.pdf, pp. 52-53.
¹⁵ https://www.higheredworks.org/nursing-education-series/.
¹⁶ https://webservices.ncleg.gov/ViewNewsFile/81/CommitteeReport_2023_09_20_Final, pp. 33/B6, 68/B41.
¹⁷ https://www.ncleg.gov/Sessions/2023/Bills/House/PDF/H259v7.pdf, pp. 336-344.
¹⁸ https://webservices.ncleg.gov/ViewNewsFile/81/CommitteeReport_2023_09_20_Final, p. 696/H9.
¹⁹ https://webservices.ncleg.gov/ViewNewsFile/81/CommitteeReport_2023_09_20_Final, p. 69/B42;https://www.northcarolina.edu/apps/bog/doc.php?id=67237&code=bog.
²⁰ https://www.wral.com/story/new-state-budget-takes-aim-at-hunger-in-schools/21073674/.