What will North Carolina policymakers be working on in 2016 and beyond? If you desire novelty, expect to be disappointed. Public education, health care and transportation were major issues during the 2015 legislative session. They will continue to be major issues for many years to come.
During the last session, the General Assembly took major action on all three fronts. On public education, lawmakers funded the next phase of a multi-year strategy to shift teacher compensation away from irrelevant credentials and seniority in favor of recruiting high performers into the profession.
On health care, they finally approved a reform model for the state’s costly Medicaid program that will blend provider-led networks and commercial insurers in a new system to provide more access and choice to recipients and more fiscal certainty for taxpayers.
And on transportation, lawmakers took three major steps to reduce the gap between what the state needs to spend on its highway network and what revenue it could expect from its existing mix of highway taxes and fees. These steps included changing the gas tax to reduce the rate in the short run but keep it higher in the long run, increasing car-registration fees and other charges to cover more departmental expenses and ending a longstanding transfer of more than $200 million a year out of the Highway Fund. Together, the changes translate into hundreds of millions of dollars a year in additional spending on roads and bridges.
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Most of these reforms were welcome advances in public policy, favored for decades by North Carolina conservatives. But plenty of hard work remains to be done.
Even as the General Assembly was reshaping teacher pay and funding other high-priority school needs, it chose not to enact major changes in North Carolina’s academic standards or testing programs. Instead, it deferred to state panels and commissions to come up with reforms. Some of the resulting recommendations might prove useful. Others amounted to passing the buck right back to the State Board of Education or the legislature itself.
My own view is that education reform in North Carolina cannot proceed effectively without a broader consensus about standards and accountability. The Common Core standards as originally designed are significantly flawed and highly unpopular among many parents, who also feel their children are taking too many standardized tests of too little utility. On the other hand, using “North Carolina-only” standards and testing instruments would be a waste of time and money – removing a critical tool for holding public schools accountable and giving administrators too much power to weaken standards over time to make the education system look better.
As for Medicaid reform, passing the 2015 legislation was only the beginning of a process that will take many years. North Carolina’s largest hospitals are already forming alliances to capture as much of the future Medicaid market as they can, as are several for-profit and nonprofit insurers. The new system will combine statewide options with regional networks. No one knows what all of this will look like. Also, federal regulators must approve the various pieces of the system, since most North Carolina Medicaid dollars – although originating as taxes paid by North Carolinians – are first shipped to Washington and then returned with lots of strings attached.
Regarding transportation, the state’s funding gap was reduced, not eliminated, during the 2015 session. We still need billions of dollars worth of new and refurbished roads that cannot be financed at current tax rates. Some policymakers favor higher gas or car taxes to make up the difference. Others favor more reliance on direct user charges, including tolls on limited-access lanes and higher fees for heavy trucks that inflict more wear and tear on pavement. Still others think our true road needs could be met by eliminating state funding for transit systems and political boondoggles.
As you can see, even the busy legislative session of 2015 left many big questions on the table. North Carolina’s continued growth and development depend on coming up with the right answers.
John Hood is chairman of the John Locke Foundation.