The North Carolina Senate
The Honorable Phil Berger, President Pro Tempore
The Honorable Sydney Batch, Minority Leader
The North Carolina House of Representatives
The Honorable Destin Hall, Speaker
The Honorable Robert Reives, Minority Leader
Dear Mr. Speaker, Mr. President, Leaders, Members of the General Assembly and fellow North Carolinians,
We are now nearly three months into the fiscal year and one of only two states in the nation that has not passed a comprehensive budget that will govern this fiscal year. The people of North Carolina expect and deserve better. I urge you to do the hard work and send me a fiscally responsible budget I can sign.
In the absence of a comprehensive budget, the following items cannot wait and demand your attention in your September session.
1. Medicaid Rebase Funding
OSBM’s and DHHS’s actuaries and economists strongly indicate that an additional $319 million is needed to fully fund the Medicaid rebase. We understand that General Assembly staff believe the amount needed is closer to $190 million. I am willing to compromise at $190 million with a commitment to reevaluate in January where expenditures are trending six months into the fiscal year. At that point in time, we can work together to determine if the funding is sufficient, additional funding is needed, or provider cuts will need to be implemented.
2. Public Safety (see Attachment 1)
As I proposed in my March budget, I am again requesting $195 million for public safety initiatives that will provide critical funding to defend North Carolina communities from school-and community-based violence and combat the fentanyl and opioid crisis. This funding would provide law enforcement with additional pay increases and recruitment and retention bonuses. Our people must be and must feel safe in their communities.
3. Teacher and State Employee Pay Raises (see Attachment 2)
I’m requesting that you fund my teacher and state employee pay recommendations - providing teachers with an average 5.9% increase, restoring masters pay, and giving other school personnel a 3% increase ($451.6 million request). State employees would be provided with a 2% raise ($226.5 million request).
I remain mindful that our current tax structure provides for less recurring revenue in the second year of the biennium than in the first. We must pursue a tax structure that is fiscally responsible and prepares for the tremendous growth our state is experiencing and the quality of services our residents deserve.
In support of disaster recovery, our focus remains intently on the mountains and recovering from Helene. Just this week, I have requested $13.5 billion from the federal government for Helene needs, including for small businesses. However, our western NC businesses cannot afford to miss another peak tourism season. I’m imploring you again to act with urgency to provide needed relief to the backbone of the western NC economy – our small businesses. Finally, I urge you to fund the $26.75 million needed for Chantal recovery that I have sent under separate cover.
Thank you for your partnership as we work to keep North Carolina strong.
Sincerely,
Josh Stein
Governor
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