On June 28, Governor Cooper vetoed House Bill 966 [2019 Appropriations Act], the budget bill. The most-asked question of legislators now is “What happens next?” In theory, the answer is simple: The legislature can override the veto. But that isn’t easy. With all legislators present, it takes 72 votes in the House and 30 votes in the Senate to override a veto. Since only 65 House members and 29 senators are Republicans, it will take a bipartisan vote to override the veto.
In the Senate, a total of 33 senators voted for the conference report on the budget — more than enough votes to override the Governor’s veto. However, in the House, only 68 House members voted for the conference report on the budget or announced their support — less than the required number of votes to override the veto. Prior to adoption of the conference report on the budget, House leaders worked to gain bipartisan support for the budget and three Democratic Members, Reps. Cecil Brockman (D-Guilford), Elmer Floyd (D-Cumberland) and Howard Hunter (D-Hertford) voted for the budget conference report. As noted in the media, monies to fund projects and programs in the districts of Democratic members were included in the conferenced budget. Even with money flowing to projects and programs generally supported by the Democratic members, the bill failed to garner sufficient support to override the veto.
Subsequently, House leadership — primarily Speaker Tim Moore (R-Cleveland) — has worked to garner additional support — showing a willingness to seek additional funding for projects and programs. While the Governor explained his veto by citing the need to invest in public schools, teacher pay and health care, most of the focus has been on his demand for Medicaid expansion. In an effort to respond to this demand, Speaker Moore allowed a type of Medicaid expansion to be heard in committee and placed on the House calendar for consideration, HB655 [NC Health Care for Working Families]. Presumably, that bill will not be heard by the full House until he has commitments from Democrats to support the budget. HB655 received a strong vote in the committee that heard the bill, and the conventional wisdom is the bill would pass with a large majority of Democrats and one or two dozen Republicans supporting the bill.
More than two weeks have passed since the Governor vetoed the bill and no one seems to know what will happen next. No significant negotiations between the Governor and House and Senate leaders have occurred. House leaders continue to seek votes to override the veto, but how long will this effort continue? Both the Governor and legislative leaders have communicated through the media, but no one expects negotiations via the media to result in any compromise or breakthrough.
So what could happen?
First, the House and Senate could just give up and go home. If this happens, the recurring funding in last session’s budget would remain in place. Teachers would still get paid. Many programs would still be funded. The State Highway Patrol would continue to function, and NCDOT would continue to build roads. However, the pay raises for state employees and teachers would not happen. New capital projects would not be started, and some number of programs would be without funding, as they were funded with nonrecurring funds.
Second, the budget could be cut into its component parts and sent back to the Governor. If that were to happen, the Governor would have to decide if he wanted to veto a public safety bill, one involving funding for law enforcement, prisons and programs like Raise-the-Age, that has nothing to do with his chief complaints about the budget involving increased funding of public education and health care. Will the public support the Governor not approving funding new school construction or school safety programs because he prefers teachers to get larger pay increases?
Third, the Governor and legislative leaders could agree to compromise in some fashion. While this might be seen as the most sensible alternative to outside observers, the differences between the two sides are significant. The House may be willing to pass a Medicaid expansion-type bill, for example, but no one sees any likelihood of the Senate passing such a bill. If that is true, what is the point of holding up the funding of many projects and programs that have broad support? Legislative leaders have included inducements for Democrats (including the Governor) to support the budget bill. They are not likely to simply allow the Governor to cherry-pick those portions of the budget he supports for inclusion in some compromise budget.
If the problem was not having the money to spend on projects and programs, the public might understand the budget impasse, but the legislature’s budget is hundreds of millions of dollars less than the money available to spend. The budget impasse reflects serious philosophical differences, and it also reflects very different perspectives on how this might play out in the elections in 2020.
The only obvious movement to resolve some set of budget differences came with the House’s unanimous vote for HB111 [Supplemental Appropriations Act]. Unlike HB966, a 400-page bill, HB111 is only a six page bill. HB111 only addresses a handful of funding issues, like funding increases in Average Daily Membership (ADM) for public schools — essentially increases in public school enrollment The bill also allows the UNC’s Board of Governors to carry forward unexpended UNC enrollment funds to continue the financial obligations of the NC Promise program — the program that keeps tuition fixed for students at the rate charged when they enter Elizabeth City State University, UNC-Pembroke, and Western Carolina University.
HB111 also implements some disaster relief provisions in the vetoed budget, and provides the minimum funding necessary to implement Raise-the-Age. There was only one capital project only partially funded in the FY 2018-19 budget: the Western Carolina University steam plant project. HB111 adds the money to complete that project.
The presumption is everything in this bill is totally noncontroversial, and that presumption was likely confirmed by the unanimous House vote. No doubt, some legislators would have liked to see more included in the supplemental appropriations bill. However, the idea was to pass what was necessary but not to pass anything that would relieve the pressure to pass a complete budget.
The Senate’s version of a bare-bones appropriations bill was approved in a Senate committee yesterday. HB961 [Ensuring Authorization of Federal Funds] appears to only appropriate some federal funding coming to North Carolina. These funds are primarily used to pay for various human services, like health care. It will be interesting to see if this approach garners the same bipartisan support that the House bill did.
As an Appropriations Chair, I assumed House and Senate leaders were in agreement on what was going to be in a supplemental appropriations bill. Obviously, the House appropriations chairs made a bad assumption, and I doubt we’d have pieced together HB111 if we’d known that the House and Senate would take such different approaches to the adoption of these stripped down appropriation bills. If House and Senate leaders cannot agree on a small step forward towards addressing the budget impasse, one has to wonder how we can address the more complicated budget issues dividing the House, Senate, and Governor Cooper.
In the coming weeks, my expectation is the House and Senate will not have as many voting sessions as usual. The Senate went home on Tuesday this week and is already shutting down its committees.
Both senators and House members reasonably expected to be home by this time of year and increasingly legislators will need to consider returning to their regular jobs and honoring family obligations. My hope is that, with a slower legislative pace, the Governor and legislative leaders will stop negotiating through the media and in social media, and instead will focus on resolving the budget impasse. If that isn’t possible, then we should head home and let the voters decide who is at fault for the failure to adopt a budget.
A $24 billion compromise state budget proposal that provides pay raises supported by the 