August 30, 2019

NC Legislative Update: August 2019 #5

David Ferrell, Michelle Frazier, George Smith, III

Maynard Nexsen

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The House held session Monday through Thursday this week, while the Senate was in town Monday through Wednesday. Both chambers continued to advance “mini budgets” by using smaller, individual bills with select portions of the budget vetoed by Governor Cooper earlier this year. The Governor has criticized this effort to piecemeal the budget and called it a gimmick, but has not said if he will veto the bills. Moving the budget in pieces has been brought up before as a tactic to get around a budget deal tied to the Governor’s Medicaid expansion demand. Democrats have called this a political move to force Governor Cooper to veto seemingly popular bills before an election year, but most mini budget bills have passed with Democratic support.

Governor Cooper received the following mini budget bills containing salary raises this week. The first, House Bill 126, gives State Highway Patrol (SHP) officers a 5% raise over the next two years. The second, House Bill 226, allocates $800 million for a 5% across-the-board raise to all state employees over the two year budget. House Bill 777 spends $5 million on a 5% over two years raise for State Bureau of Investigation (SBI) officers and Alcohol Law Enforcement (ALE) officers, and it fixes their salary schedule to the (SHP) schedule, which will boost starting pay and decrease the number of years to qualify for top pay. Governor Cooper also received House Bill 609, which gives correctional employees a 5% raise over two years. All four bills were approved by the legislature unanimously. Governor Cooper will have until September 7 to veto or sign the bills, or they will become law.

One of the more controversial mini budgets to pass this week was House Bill 555, which contains provisions from the Health and Human Services budget that allocates funds for Medicaid Transformation, which is the State’s movement to capitated Medicaid contracts. The bill passed without any Democrats voting for it, as they claimed healthcare funding should include discussions around Medicaid expansion and they expressed concerns about healthcare management organizations (HMOs) denying coverage in an effort to cut costs. Governor Cooper will have until September 8 to act on this bill.

WBTV: https://www.wbtv.com/2019/08/28/bill-providing-pay-raises-law-enforcement-other-state-employees-passes-nc-senate/

WRAL: https://www.wral.com/pay-raise-bills-moving-as-governor-blasts-gop/18595249/

While the budget stalemate continues, the State will continue operating under a 2015 law that prevents a government shutdown by keeping in place the recurring funding levels of last year’s budget until a new one is adopted. House Speaker Tim Moore has indicated that he still believes that the House will be able to override the veto. This will require at least several House Democrats to be absent, since 51 of the 55 House Democrats have signed on to a letter pledging that they will not vote to override Governor Cooper’s veto. Despite passing individual portions of the budget, the House has still placed the motion to override the veto on their calendar daily.

Governor Cooper Vetoes Excellent Public Schools Act

Governor Cooper vetoed Senate Bill 438, the Excellent Public Schools Act of 2019, this week. The bill made various changes to the State’s Read to Achieve program, which was championed by Senate President Pro Tem Phil Berger, and is meant to address literacy rates in grades K-3. The program has faced some pushback from teachers, who claim that the mandated reading assessments takeaway from instructional time, and parents whose children have had to attend summer reading programs in order to advance to the next grade level. In his veto message, Governor Cooper acknowledged that teaching children to read was critical for success, but claimed that the reading assessments in the Read to Achieve program have been ineffective. Cooper also mentioned an ongoing dispute over the procurement process for the contract to administer the assessments, after State Superintendent Mark Johnson awarded the contract to a new vendor, despite committee recommendations in favor of another. The bill did not pass the House with a veto proof vote, and it is unclear if the legislature will be able to override.

Healthy NC Bill

Conferees have been appointed to the omnibus healthcare bill this week. The Senate conferees are the following: Senator Hise (Chair), Senator Krawiec, Senator Burgin, and Senator Perry. The House conferees are Representative Dobson (Chair), Representative Lambeth, Representative White, and Representative Potts.

The house passed the bill with nine parts that do the following: creates a Psychology Interjurisdictional Compact (PSYPACT), allows licensed marriage and family therapists to perform first examinations for involuntary commitments, eliminates redundant adult care home inspections, creates the Lupus Advisory Council, requires that insurers develop formularies for Center for Medicare and Medicaid Services (CMS) approved step therapy, requires insurers to cover oral chemo drugs the same as injected chemo, requires Medicaid to pay for telemedicine, requires private insurance and the State Health Plan to cover telehealth services, and creates the North Carolina Healthcare Solutions Task Force. The Senate has historically blocked some of these provisions dealing with what they consider to be insurance mandates. It is expected that the Senate will push for Certificate of Need (CON) law changes as a bargaining chip in these negotiations, but House leadership has indicated that CON reform is a non-starter for them.

2019 Session Laws

The following 206 bills have become law this session:

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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Maynard Nexsen

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NC Legislative Update: August 2019 #5

Governor Cooper Vetoes Excellent Public Schools Act

Healthy NC Bill

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