Governor Cooper’s proposed budget, released with great fanfare Wednesday, shows his continued disconnect with the challenges the state’s taxpayers and businesses experienced over the past twelve months as a result of the restrictions brought on by the COVID-19 pandemic. And though vaccinations against the virus are increasing, there is no guarantee that business and services will return to the previous level prior to the pandemic.
Joseph Coletti, senior fellow in fiscal studies for the John Locke Foundation, notes that Cooper’s proposed budget spends $2.8 billion more for the upcoming fiscal year than was budgeted for the current year and more than 9.3% more than the rate of inflation and population growth for the year. Considering the economic challenges and unknowns associated with the governor’s restrictions that were designed to “bend the curve” but soon morphed into the elimination of the COVID-19 virus, there is reason to be cautious in financial planning over the next biennium.
Mr. Colleti commends the governor for avoiding tax increases in his budget but that is a weak compliment considering that a majority of North Carolinians have experienced major financial and personal hardships caused by the pandemic’s disruption of businesses and services. A tax increase of any nature would be totally uncalled for, destructive for the fragile economy and would only deepen public resentment.
The governor’s budget is focused on appealing to what seems to be his most ardent voter block, albeit a relatively small block, the North Carolina Association of Educators. This organization, which is for all intents and purposes a teacher’s union, has experienced declining membership over the years to the point that it will not provide member numbers to the public.
Yet the governor targets this one group for major consideration. His proposed biennial budget includes $485 million in teacher and administrative pay with average pay raises of 10%, plus 7.5% raises for school district central office staff and noncertified public school employees. In addition to these pay raises Cooper proposes $2,000 bonuses for all educational staff this year and $1,000 the following fiscal year of the budget period and establishing an added $80 million for more school medical staff to include nurses, counselors and social workers.
Across the board Governor Cooper is spreading the state’s wealth with 7.5% pay raises for community college and UNC system employees, 5% pay raises for all other state employees plus a $1,000 bonus each year in the new biennium. Retired state employees would receive a 2% recurring cost of living increase plus 2% additional raises for the next two years.
The legislature attempted to provide pay raises to educators last year in addition to scheduled step increases and bonuses for 2020. But the governor refused to accept the pay proposal unless the legislature would approve expansion of Medicaid, which the legislature opposed out of concern for the state’s budget and fear that the federal government would reverse its support of the expanded services which will tax the state’s finances.
There is no question the state’s teachers and public employees have worked hard under unique and stressful conditions. And they have performed admirably. But what about the rest of the state, particularly the families and businesses who have likewise been stressed by the health issues brought on by the pandemic and the severe restrictions mandated by the governor’s use of the Emergency Powers Act?
Yes, funds have been provided through a variety of federal programs but they have not made up for the loss of jobs and job security destroyed by both the pandemic and government’s subsequent restrictions. Rather than proceeding cautiously, Governor Cooper proposes using one-time coronavirus relief funds, approximately $5 billion, to benefit his supporters and in the process commit the state to financial responsibilities that will need tax support in the future.
Governor Cooper should reconsider his cavalier spending proposals that ignore and demean the economic hardships because of reduced paychecks, lost jobs and closed businesses, some permanently, created by his restrictive mandates and the pandemic. He needs to send a message to the legislature and the whole state that he understands this challenge and that he is willing to work with state leaders to move the state’s economy forward in a cautious and effective manner that looks beyond his final term as governor.