North Carolina state budget won't become law until September, House leader says

A final North Carolina state budget won't be enacted until September, the House's top leader said Monday. That could scuttle efforts by Gov. Roy Cooper's administration for Medicaid expansion to begin in early fall.

House and Senate Republicans are whittling down dozens of outstanding spending and policy issues within a two-year spending plan that was supposed to take effect July 1.

While some big-ticket items like tax cuts and worker raises have been settled, other details remain unresolved. Add travel and other activities by rank-and-file lawmakers and the narrow GOP veto-proof majorities in the General Assembly, and House Speaker Tim Moore said the periods during which formal business can be conducted in Raleigh are limited.

Sen. Ralph Hise, a Mitchell County Republican and one of the chief budget negotiators, told reporters that votes on a budget agreement could happen in two weeks if differences can be worked out in a reasonable time. Any final budget could be vetoed by the Democratic governor, with override votes to follow.

When asked later Monday to describe the chances that a final budget could be carried out by the end of August, Moore replied: “Zero.”

“Just with some absences I know that the Senate has on their side, and with just some of the logistics that have been talked about at this point ... you’re talking about a September date for actual passage — signing (the bill) into law and all that,” Moore said.

A separate law that Cooper signed in March would expand Medicaid to potentially 600,000 low-income adults, but it can't happen until a state budget law is enacted.

Cooper health Secretary Kody Kinsley unveiled a plan last month by which the expanded coverage would begin Oct. 1 as long as his agency received a formal go-ahead by legislators to accept expansion by Sept. 1. Otherwise, Kinsley said, implementation would be delayed until at least Dec. 1.

Legislative leaders have refused to permit the implementation of expansion without the budget's passage, as Cooper has sought. His administration has said the state misses out on more than $500 million in federal funding for each month that expansion isn’t implemented.

Moore suggested that Sept. 1 wasn't a hard deadline.

“I think Oct. 1 expansion can still happen as long as we enact the budget in early September,” he said.

Legislative leaders have provided few details on neither the agreed-upon pay raises for state employees and teachers nor the extent of additional individual income tax rate reductions. Moore said any pay raises would be made retroactive to July 1.

State government has benefitted in recent years from revenue overcollections, giving lawmakers the ability to spend more, borrow less and reduce tax rates.

The Office of State Budget & Management said Monday that government coffers collected more than $33.5 billion in revenues for the fiscal year ending June 30, or slightly over $3 billion above what had been anticipated to carry out last year's state budget law. The total was $89 million less than was projected to be collected in a May consensus forecast by the state budget office and General Assembly staff.

Cooper and State Budget Director Kristin Walker have warned that deeper individual income tax cuts considered by GOP legislators could lead to shortfalls that could affect the state's ability to adequately fund education.

Moore and Senate leader Phil Berger have said this year's tax agreement contains language allowing deeper rate reductions only if the state reaches certain revenue thresholds. Berger and Moore planned more budget talks early this week, Moore said.

Moore said he still anticipated that legislators in his chamber would return to Raleigh next week to cast override votes on several vetoes that Cooper issued last month. Other non-budget business also could occur, he said.