In North Carolina, Spring is just a few weeks away, but budget season is already here. On Wednesday, Democratic Governor Roy Cooper released his proposed state budget for the 2023-25 biennium, proposing to spend $32.95 billion in the first year of the biennium, an increase of nearly five billion dollars from the current fiscal year’s budget. The proposal places a primary emphasis on public education, with $4.5 billion to invest in school construction, and to provide an average raise of 18% for teachers, with every teacher receiving at least a 10% raise in the first year. The plan also calls for 1,000 additional school nurses and social workers and raises for school personnel like bus drivers and counselors. Additionally, on the heels of the General Assembly inching closer to expanding Medicaid, the Governor’s budget would designate $1 billion to community care facilities, schools, and prisons to address mental health.

The Governor’s budget would also reverse some of the tax cuts implemented by the General Assembly during last year’s session. Although the budget proposal would not increase any taxes, it would halt the scheduled income tax deduction for individuals earning more than $200,000 and would stop the scheduled phasing out of the state’s corporate income tax. In response, Senate President Pro Tempore Phil Berger (R-Rockingham) released a statement calling the Governor’s proposal “an irresponsible, unserious proposal from a lame-duck governor who wants future North Carolinians to pick up his tab.” House Speaker Tim Moore (R-Cleveland) echoed the same sentiment, saying the Governor’s budget “takes the same reckless approach to spending that his fellow Democrats have taken in Washington.”

Because the General Assembly is controlled by Republicans, the Governor’s budget proposal will not ultimately be adopted or followed. However, lawmakers can find the document helpful because of specific agency requests within the proposal that have bipartisan support. At the conclusion of a joint meeting with House and Senate leaders Thursday morning where the Governor’s proposal was presented, Senator Ralph Hise (R-Mitchell), who chairs the Senate Appropriations Committee, told members a “real budget” would be released soon.

Medicaid Expansion

Just a few years ago, Republicans in both chambers of the General Assembly opposed Medicaid expansion. But this week, the Senate passed a bill to expand Medicaid nearly unanimously, with just two Senators voting in opposition. HB 76: Access to Health Care Options would expand the Medicaid program to cover all adults with incomes at or below 138% of the federal poverty level. The North Carolina Department of Health and Human Services estimates that 600,000 low-income individuals will become eligible for Medicaid should the state ultimately agree to expansion. The bill’s passage comes after a compromise between the House and Senate was announced last month that included a reduction in the state’s certificate of need regulations for health care facilities and a provision saying if work requirements are ever authorized by the federal government, then the state would implement similar requirements.

The bill’s Medicaid expansion provision is tied to passage of a state budget, meaning if a state budget does not pass or is vetoed by Governor Cooper, and the veto is not overridden by the General Assembly, Medicaid will not be expanded in the state. Because the House filed and passed the initial version of the bill, HB 76 will now head back to the House for a concurrence vote. After the House concurs, the bill will go to Governor Cooper’s desk for his signature. Medicaid expansion has been a top priority for the governor since he first took office in 2016.

Critical Infrastructure Protections

In December, electric substations in Moore County were intentionally targeted and destroyed, leaving 45,000 households without power for several days. Attacks have persisted since then, with a substation attack in Randolph County in January, and other instances in neighboring states. In response, Moore County’s Senator, Tom McInnis (R-Moore), filed SB 58: Protect Critical Infrastructure, which unanimously passed the Senate this week.

The bill would increase punishments for those who intentionally damage utility equipment by creating a new statute making such acts a Class C felony and carrying the potential of up to six years in prison. If someone were to die as a result of the damage, the offender could receive a sentence of 13 years in prison. The statute would also impose a $250,000 penalty for causing damage to a utility and would authorize those injured by a violator’s action to recover treble damages from the perpetrator. On the Senate floor, Senator McInnis said we “must send a message to the would-be bad actors that these attacks will not be tolerated, and the perpetrators will be held responsible for the chaos and damage they create.”

Energy Service Choices

The House passed a bill this week to prohibit towns and counties from adopting ordinances that would restrict homeowners and businesses from connecting to natural gas and other energy services of their choice. HB 130: Preserving Choices for Consumers would prohibit a city from adopting an ordinance that “prohibits connection, reconnection, modification, or expansion of an energy service based on the type or source of energy to be delivered to the end-user of the energy service.”

The bill would not prohibit a local government from recovering costs associated with reviewing or issuing a permit, nor would it impact any contract currently in place with a utility owned by a local government.

When asked if local governments were doing this in North Carolina, bill sponsor and Energy Committee Chairman Representative Dean Arp (R-Union) told members that some localities in other states were pursuing similar prohibitions on energy choices, and that the City of Asheville was currently exploring it. The bill passed with bipartisan support, with all Republicans and ten Democrats voting in favor of the measure.

The bill now goes to the Senate. Last session, a similar bill passed the General Assembly but was vetoed by Democratic Governor Roy Cooper. In his veto statement, the Governor said the bill “undermines North Carolina’s transition to a clean energy economy that is already bringing in thousands of good paying jobs.”

Omnibus Gun Bill

Several bills reforming North Carolina’s gun laws have passed one or the other chamber this year, but a bill encompassing most of the Republican lawmakers’ objectives is on its way to Governor Cooper’s desk. SB 41: Guarantee 2nd Amendment Freedom and Protections passed the House by a vote of 70 to 44.

The bill has four main components, including:

• Allowing an individual with a valid concealed handgun permit to carry a gun into a church or other worship facility that is also on educational property. The bill clarifies that the educational facility can only be a private school, and not a public school, nor a public or private university. Guns would not be allowed on the property during the school’s operational hours either.
• Authorizing certain law enforcement facility employees who have been designated, in writing, by the head of the appropriate law enforcement agency, to carry a concealed handgun into the designated law enforcement or correctional facility.
• Repealing the pistol purchase permit requirement, which requires an individual who wants to purchase or receive a handgun to receive a permit from their county sheriff. Republicans have called this a “Jim Crow era law” that was created to keep guns out of the hands of African Americans. Democrats have countered that the provision provides background checks during private sales or transfers that otherwise would not be conducted.
• Creating a statewide firearm safe storage awareness initiative to educate the public about safe firearm storage. The bill would also facilitate the distribution of gun locks, and provide local communities and law enforcement agencies with a comprehensive toolkit to launch firearm safe storage initiatives and educational programs.

Amendments by Democrats to create universal background checks and implement a red flag law were not entertained on the House floor. All Republicans, and three Democrats, voted in favor of the bill. Governor Cooper is not expected to sign the measure, setting up a potential override vote.

Upcoming Legislative Meetings

Monday, March 20

4:00 PM Senate: Session
4:00 PM House: Session

Tuesday, March 21

10:00 AM House: Local Government
10:00 AM House: Health
11:00 AM House: Pensions and Retirement
1:00 PM Senate: Commerce and Insurance
3:00 PM House: Commerce

Wednesday, March 22

10:00 AM House: Appropriations, Capital
10:00 AM Senate: Health Care
10:00 AM House: Transportation

Thursday, March 23

10:00 AM House: State Personnel