NC’s budget might not recover from coronavirus until 2023. Cooper wants federal help.
Gov. Roy Cooper is asking the federal government to help North Carolina deal with a projected $5 billion decline in local and state revenue due to the coronavirus and resulting economic shutdown.
With federal lawmakers expected to begin negotiations over another coronavirus aid package this month, Cooper laid out his priorities in a letter to members of the state’s delegation to Congress.
The Democratic governor wants “robust and flexible” money for state and local governments, more protections for students and teachers returning to school, continued funding of expanded federal unemployment benefits and more.
“Please do all you can to push towards swift and successful outcomes as you consider what is necessary for North Carolina and our country to emerge from this pandemic stronger than before,” Cooper wrote in the letter dated Thursday. “The actions you take in the next few weeks are vital to our ability to emerge from this crisis and restore the economic prosperity we know we are capable of.”
North Carolina has more than 90,000 lab-confirmed cases of coronavirus, and more than 1,600 people have died in the state. Cooper announced earlier this week that North Carolina would remain in Phase Two of its reopening plan until at least Aug. 7.
Many of the items that Cooper is calling for were included in the proposed $3 trillion HEROES Act, which was passed by Democrats in the U.S. House in May. The bill included money for state and local governments, another round of stimulus checks to Americans, an extension of unemployment benefits, student loan forgiveness and rental and utility assistance.
The Republican-led Senate has not taken up the measure and is expected to put forward its own package, expected to be closer to $1 trillion and more narrowly focused than the Democratic proposal. Among the priorities for Senate Majority Leader Mitch McConnell is liability protection for employers.
White House Chief of Staff Mark Meadows, who represented far-western North Carolina in the U.S. House until joining the Trump administration earlier this year, is expected to be part of the negotiations.
The $600 federal unemployment benefit, paid on top of state benefits, expires July 31. North Carolina’s unemployment rate is 7.6%, twice what it was before the pandemic began. More than 1.9 million unemployment claims have been filed since mid-March.
Long-term decline in state revenue
The federal government has passed a series of aid packages dealing with the coronavirus pandemic since it erupted in March, but it has limited how that money can be spent. Congress has, so far, denied requests for more flexibility in using that money.
Cooper said the state is not expecting to return to its previously expected 2020 revenue levels until at least 2023, “even assuming the eradication of COVID-19 in the near future.”
North Carolina received a little more than $3.5 billion from the CARES Act, the largest aid package passed. Charlotte, Guilford County, Mecklenburg County and Wake County were eligible for additional funds due to population. The North Carolina General Assembly passed multiple spending bills using $2.1 billion of that money for education, health care, small business loans, food banks, medical research, testing and personal protective equipment, and other purposes.
Greensboro Mayor Nancy Vaughan said earlier this month that her city’s budget was hit with a significant loss in tax revenue and unexpected spending related to the coronavirus, such as hazard pay and personal protective equipment.
She said the Greensboro Coliseum canceled more than 400 events and the city’s new performing arts center canceled its opening as well as 100 events. Those lost events not only impact the city’s tax revenue collection, she said, but restaurants, hotels and shops that pick up business from visitors.
“We were hit really hard,” she said.
But some Republicans, including Sen. Thom Tillis of North Carolina, have been hesitant to send a blank check to states, particularly those that had budget problems before the coronavirus.
“I’m not so sure that taxpayer dollars for North Carolina should go to a state, a county, or a city that, like you said, was in poor economic shape before we ever had the virus,” Tillis said during an April town hall meeting, according to WRAL.
Other needs
Cooper said the state needs “federal funds dedicated to education, both in K-12 settings and for our colleges and universities” in order to comply with social distancing requirements and implement distance learning, both large components of Cooper’s back-to-school plan.
Cooper asked for a doubling of the Federal Medical Assistance Percentage from 6.2% to 12% through at least Sept. 30, 2021, which he said “will enable North Carolina to address a number of demands on our healthcare system related to COVID-19 and free up state dollars that are badly needed in other areas.” The FMAP rate is used to reimburse states for the federal share of most Medicaid expenditures.
Cooper also called for a rental and utility assistance package and an investment in programs to “support small businesses, expand national service opportunities, rebuild our infrastructure, and create opportunities.”
He also said the state needs support from the federal government on testing supplies and personal protective equipment (PPE).
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This story was originally published July 17, 2020 at 1:27 PM.
