The General Assembly returns to Raleigh today. On the House calendar is an override consideration of the Governor’s veto of the 2019-20 $24 billion budget. Because the budget is a House bill, the override vote starts in the House. In addition to all the Republicans voting to override, they would need seven democrats to meet the 3/5 of members voting and present threshold for an override to succeed. If it’s overridden in the House, the Senate would need one Democrat to vote with all Republican Senators.
Regular readers know that JLF has carefully watched, analyzed, reported and commented on the budget. We believe it is 1) fiscally responsible, 2) protects and enhances freedom and 3) if not enacted, would have detrimental effects on services, people and your constituents.
Joe Coletti, JLF’s tax and fiscal expert, analyzed the conference report and offers 3 key takeaways:
- This budget contains no new debt and no Medicaid expansion, two important policy decisions that will protect taxpayers into the future.
- Compensation for past and present state employees, including teachers and principals, accounts for $213 million of the additional expenditures in the compromise budget.
- 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.
With fiscal discipline, restrained spending, less burdensome regulations and smarter investments North Carolina has become a beacon of freedom and opportunity, a model that other states look to. This conference budget promotes and enhances freedom, opening up even more opportunities for prosperity and economic growth. I think that’s a very good idea and offer 17 examples found in the budget. You can find my commentary here.
If the governor’s veto holds, spending for the fiscal year that began on July 1 reverts to last year’s spending. As an advocate for limited government, I don’t think that’s a bad thing. State government will not shut down and current services will continue as is. However, many of the important spending obligations and promises won’t be met. That means current and retired state employees, including teachers and principals, would not get raises or cost-of-living increases. Without support for Raise the Age, some youth accused of crimes will remain in limbo between the adult system and the juvenile system. There would be no transition of Medicaid to managed care, disrupting services to over two million current Medicaid recipients. School construction and renovations for K-12, community colleges, and universities would be delayed indefinitely. There would be no additional hurricane relief and no critical investments in infrastructure. There would be no franchise tax relief and no break for taxpayers in the zero tax bracket as scheduled. Not enacting this budget, one could argue, would be a tax increase.
But yet the governor vetoed the budget because of his insistence on Medicaid expansion. Medicaid expansion is a bad idea for many reasons, including costs, false promises of jobs created, and other states’ experiences. Here’s hoping the General Assembly represents its constituents honorably, ignores big party bosses, and does what’s best for the people of North Carolina.