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Disagreement on taxes remains biggest hurdle to passing state budget

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The North Carolina General Assembly has yet to pass a state budget, due to disagreements between the House of Representatives and Senate.

Summer's coming to a close but the North Carolina General Assembly still isn't done with the session they had hoped to adjourn by June. They're coming back next week to try and pass a budget, override Governor Cooper's vetoes and more.

Here to take a look at what's to come, is Raleigh-based journalist Bryan Anderson who follows the legislature closely.

Marshall Terry: So Bryan, Republicans have a veto-proof supermajority in both houses of the General Assembly. Since they can basically do what they want, what's the holdup with the budget?

Bryan Anderson: Well, the holdup is Republicans against Republicans — on the House side versus the Senate side. House Speaker Tim Moore has said this is his last time as House Speaker; one might expect him to make a congressional run or pursue a higher elected office. So this is his last go around and this is going to be his last skirmish with Senate Leader Phil Berger — and the two have really tangled on this budget. The biggest differences have been tax cuts and this innovation fund that the Senate wants to create.

Terry: What exactly are the differences there?

Anderson: So the Senate wants greater tax cuts than the House does. The House version of their budget was effectively maintaining the status quo, but giving a very minimal percentage point type of tax cut over a year ahead of schedule. And the Senate's version is calling for much steeper tax cuts, more immediate tax cuts. And the two halves hammered out a deal on that part.

But Berger and Moore are still in conflict on this NC Innovation Fund, which is basically a Senate goal to give $1.4 billion to a nonprofit to fund some of these innovation projects. And that has been met with some resistance in the House that says that line item is way too expensive and we need greater transparency, to know how these grants are being awarded. Right now, the language in that is pretty broad. So we don't know exactly which organizations might stand to benefit, but presumably, researchers [and] economic development initiatives, those are where this money is supposed to be going to.

Terry: So while they are all trying to come to an agreement on that issue and other things, what are the consequences of not having a state budget in place, especially as far as Medicaid expansion goes?

Anderson: Yeah, right now, the Department of Health and Human Services in North Carolina has hoped for an October 1 launch. But that launch is contingent on lawmakers getting their act together and passing a budget by the end of this month.

Now, Speaker Tim Moore told reporters this week, there's — in his words — no chance of a budget being enacted this month. So that would delay Medicaid expansion by another two months. So now we're not looking at an October 1 implementation. Now we're talking about something closer to a December 1 implementation.

Terry: This situation is giving off 2015 vibes when the General Assembly didn't pass a budget for until late September — and we've gone even longer than that before without a budget. So what happens next?

Anderson: So what happens next is you need Senate Leader Phil Berger and House Speaker Tim Moore to come to an agreement on this NC Innovation $1.4 billion line item. That seems to be the biggest hold-up, from what I can gather. Both budgets have similar policy ambitions and policy ideas on charter school expansion,expanding the Opportunity Scholarship [Program]. So there is a lot of agreement already here. So we might be seeing a deal sometime this month.

But remember, it still needs to go through all these procedural hurdles of crafting language, getting it through different desks and just that can take a week or two just to get the language out there and right and thoroughly reviewed, because you don't want to mess up the budget, at this point, if it's been two months in waiting.

Terry: This budget standoff is just one of the outstanding issues that the General Assembly faces. The legislature is also considering allowing for casinos. What's the reasoning with that?

Anderson: So, the reasoning is that there's a Danville, Virginia casino and presumably, North Carolinians who want to gamble can already do so and just drive up. So, what lawmakers are considering doing is trying to create some sort of casino-like hub somewhere in North Carolina that can get taxpayer dollars and consumer dollars to North Carolina, rather than Virginia.

Now, there is already legalized gambling in North Carolina at certain Indian casinos. And it is worth noting that there will be legalized online sports betting, potentially as early as January of next year. From the people I've talked to, there's a lot of hurdles that go into this casino-related legislation and there's an expectation that it might not be taken up in 2023 and that might be kicked down the can for 2024.

Terry: What are the hurdles?

Anderson: Well, the hurdles right now are really local control issues. You know, whenever you have major economic growth potential opportunities, there are some people who might feel left behind. And right now, you have Republicans in many rural areas who are sensitive to this issue of not wanting to, maybe, hurt the identity of their communities.

Terry: Now, as I mentioned before, Republicans are also planning to override Governor Roy Cooper's vetoes, notably, of legislation that would restrict health care for trans minors and block trans girls from participating in sports. Any chance those overrides fail?

Anderson: It does not look that way. There's six veto overrides that are currently up for discussion and five of them, including the ones you mentioned about transgender sports participation and puberty blockers, those bills are in the House. The House has said that, on Wednesday of next week, they plan to take up all five of the bills before them.

The Senate, as of now, has not yet committed to taking up its potential override, and that really is Senate Bill 49. It's what Governor Cooper calls the "Don't Say Gay" bill and that would basically say [to] teachers and counselors, you have to inform parents if a student expresses a desire to change their name or pronoun.

A big holdup for that is that Republicans have zero wiggle room. They have the exact support they needed in each chamber but [House] Representative Hugh Blackwell has opposed that parents' bill of rights legislation. So that is one of the holdups for that Senate Bill. The other five House bills, I don't see any problem getting through.

Terry: Finally, as soon as this session does end, lawmakers will be redrawing congressional maps and gearing up for [the] 2024 elections. What are you keeping your eye on with all that?

Anderson: Well, the biggest ones that I'm looking at is what's going to happen in this Mecklenburg County area.

Are you going to draw Jeff Jackson out of his district, which would give him a chance presumably for an attorney general seat? Tim Moore has also expressed interest in a congressional run in the past, we could see a district carved out for him somewhere in that Mecklenburg County area.

Also, what's going to happen to Trisha Cotham, she's in a very blue seat right now. Is she going to have another legislative term? If so, she's going to need a far more favorable district than the one she currently occupies. Is there room for her to run for Congress?

All these questions, we're going to have to wait and see and probably look at a mid-October timetable for those things to happen. There's certainly a lot of moving parts — a lot of ambitious Republicans — but the bottom line of what we can expect is definitely fewer Democratic-elected members of Congress.

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Marshall came to WFAE after graduating from Appalachian State University, where he worked at the campus radio station and earned a degree in communication. Outside of radio, he loves listening to music and going to see bands - preferably in small, dingy clubs.