STATEMENT: N.C. House budget proposal offers modest increases for state workforce, lacks crucial investments in education system, misses opportunities to advance economic mobility

RALEIGH (April 3, 2023) — Last week, the North Carolina House of Representatives released its proposed budget. While the proposal offers incremental investments in state employee compensation, health care, and legal defense services, it lacks many of the investments needed to fully fund our public education system and support households with low incomes. Indeed, as Governor Cooper’s budget proposal demonstrated, more robust investments to remove barriers to economic mobility are possible with a tax structure that requires corporations and the wealthy to contribute more and lessens the tax burden on households with lower incomes. Our state is at a critical juncture and needs policies that center people with low incomes, communities of color, immigrants, and working people.

Education

The House budget comes nowhere close to addressing the issues faced by our public schools. It fails to put North Carolina on track for meeting its constitutional obligation to provide all 1.5 million students with access to schools that generate meaningful educational opportunities. The House proposal funds less than 10 percent of the Leandro Plan in year one and less than 7 percent of what the plan calls for in year two of the biennium, while the Governor’s budget fully funds the Leandro Comprehensive Remedial Plan over the biennium. In addition, the proposal does not adequately address North Carolina’s historic teacher shortage. The pay raises in the House’s proposed budget are about half of what the Governor proposed.

We are strongly opposed to the inappropriately large number of policy changes in this budget proposal, including a massive expansion of school privatization through the school voucher program and the rapid expansion of remote and for-profit virtual charter schools, all of which would siphon hundreds of millions of dollars away from public schools across the state. The historic levels of teacher and instructional support staff shortages currently being experienced in all districts demonstrate that the state cannot sustain further diversions of resources of this magnitude.

Criminal legal system

We were encouraged to see increased funds for legal services, including $70.8 million for new public defender offices in four judicial districts covering eight counties. Funds also have been allocated to support higher education opportunities for individuals currently and previously incarcerated. Fair chance employment should be a priority in the budget to address the growing need for a stable workforce and promote economic growth.

We oppose the proposal for the State Bureau of Investigation (SBI) to act as an independent agency. Further, the proposed recommendation for SBI record checks prior to renewing revoked driver’s licenses and applying for or receiving public assistance would cause additional barriers for families living in poverty.

Additional funds should be allocated to ensure local reentry councils are available in more rural counties in the state, which tend to have limited reentry services. Equally important, greater investment should be made to support community-based reentry programs to address substance use, employment, and housing. Robust community-based reentry programs are shown to help prevent recidivism and improve public safety.

Healthcare

American Rescue Plan Act (ARPA) and Healthcare Access and Stabilization Program (HASP) funds resulting from Medicaid Expansion will bring more than $3 billion to North Carolina. We believe these funds can be leveraged further to support advocacy for health access. We appreciate the inclusion of $3 million in 2023-2024 and $7 million in 2024-2025 for the Opioid Antagonists for Local Governments Grant Program. In addition, we are pleased to see the inclusion of $4 million in 2023-2024 for the NC Harm Reduction Coalition to be used to support their current programs and to provide opioid antagonists for use by emergency medical services and reentry programs.

While we are pleased to see the inclusion of the above-referenced funding, the House’s proposal is missing several important health initiatives. These initiatives include:

  • Financial support to county Department of Social Services offices for the public health emergency unwind

  • Maternal mortality and morbidity reduction beyond the Maternal and Child Health block grant

  • A new N.C. psychiatric support line

  • The Governor’s proposed program, IHOPE (Improving Health Outcomes for People Everywhere Fund), which would support behavioral, child welfare and family wellbeing, and rural health initiatives

Workforce

While the House budget includes significant investment for economic development generally (e.g., site development) and apprenticeships, it does not include increases in unemployment insurance benefit amounts or duration as contemplated in the Governor’s budget, a missed opportunity to help safeguard workers in the event of an economic downturn.

The House budget invests less than 20 percent of the funding that the Governor’s budget proposed over the biennium to sustain the childcare industry through compensation and fixed-cost grants in light of federal funding phasing out this year. This minimal investment will not sustain our early childhood system in the face of the current well-documented crisis in the early childhood workforce.

Lawmakers should adopt a budget that insulates our state from future crises, strengthens critical safety net programs, and centers the needs of households with low incomes and communities of color. As the budget negotiations proceed, we call on legislators to prioritize these investments for the benefit of all North Carolinians.

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