North Carolina lawmakers headed back to the legislative building this week after taking last week off. Legislators were welcomed back with packed schedules of committee meetings and floor voting sessions in both the House and the Senate. The agenda for this week included another handful of mini budget bills, presentations on the status of the state's transformation to Medicaid managed care, and discussions of three redistricting reform bills filed this session. This week marked the start of the two-week countdown until long session adjournment, at least for members of the Senate. Senate leadership has stated that members should plan to wrap things up by October 31. Other than the hopes of House leadership that they too will be able to adjourn at the end of the month, members still have not been given a firm adjournment timeline.

Members of both the House and the Senate will reconvene for what could be their last week of work for this year's long session on Monday, October 28 at 7:00PM. 

Medicaid Transformation Updates

The House Health committee held a lengthy meeting Wednesday morning to discuss the current state of North Carolina's transition to a Medicaid managed care system. Representatives from the North Carolina Health Care Association (NCHA), the North Carolina Medical Society, and the Department of Health and Human Services (DHHS), the department tasked with implementing the transition to managed care, presented before the committee, each group updating members on where they stand in their transformation processes. Much of the conversation during all three of the presentations centered around the timeline as members expressed concerns about whether it is possible to everything done by February of next year.

The move to transition the state to a managed care system started back in 2015 when the General Assembly passed legislation giving the green light. In the years since, lawmakers have allocated funds through each biennium's budget bill to fund the program's implementation. But since the state budget is currently still held up in the stalemate between Governor Roy Cooper and legislative leadership, largely over Medicaid expansion, DHHS has been operating on a continuing resolution budget which contains only the recurring funds from the previous state budget. Continuing resolution funding was established for this very reason: to keep state agencies and departments up and running in the event that a budget is not passed by the legislature. The General Assembly tried to pass a mini budget proposal, HB 555: Medicaid Transformation Implementation, to give DHHS some of the funds included in HB 966: 2019 Appropriations Act. HB 555 was also vetoed by the Governor and still has not received Senate action after the veto being override by the House.

The original plan was for managed care to go live in two phases throughout the state, however, the phase one roll out was already delayed earlier this year. The program will instead go live statewide on February 1, 2020. 

DHHS Secretary Mandy Cohen made it clear to legislators during her presentation that she felt confident in the department's ability to make the transition happen within the scheduled timeframe, emphasizing that further delays would be extremely costly. Sec. Cohen was also very clear with committee members that having a budget for transformation implementation is crucial to DHHS's ability to continue moving forward with their work. Without a budget by mid-November, DHHS would have to start rolling back much of their work. In addition to a budget, Sec. Cohen urged the committee to work to fix language currently in statute that leaves DHHS vulnerable to the possibility of $42 million in funding cuts, in addition to assuring the department that the headquarters will not be moved out of Raleigh. Sec. Cohen argued that the right budget, no possibility of funding cuts, and keeping headquarters where it is would help stabilize the department, giving everyone more confidence in their work moving forward. 

Presenters from the North Carolina Health Care Association, which represents many of the hospitals throughout the state, and the North Carolina Medical Society, which represents many of the state's medical providers, shared with the committee that many of their members are worried that the transition may be moving too quickly without the right resources in place, potentially leading to lesser-quality care to patients across the states.

Members of the committee were receptive to all of the comments made by the presenters. Some legislators, like Rep. Donny Lambeth (R-Forsyth), share the concern that the managed care system will not be ready to go live by February, suggesting that it may be time to have conversations about delaying the rollout once more until July of 2020. Others, such as Rep. Gale Adcock (D-Wake) suggested negotiating a new version of a budget proposal in order to give the funding to the department that they need, rather than delaying the rollout a second time. 

More Mini Budgets

As session winds down for the year, lawmakers rolled out another handful of mini budget proposals early this week to provide funding to a number of departments and agencies throughout the state. The goal of many of the mini budgets proposed so far this session has been to move through relatively noncontroversial provisions of the original budget bill. This week's proposals, however, did not come without their fair share of debate. 

The House Committee on Transportation Appropriations discussed a proposal aimed at providing some relief to the North Carolina Department of Transportation (NCDOT) which has faced a shortage of cash recently, causing the department to delay a number of projects throughout the state. HB 967: DOT Fin. Preservation and Accountability Act. would provide NCDOT with a $360,200,000 transfer to fund the reimbursements of Map Act claims. Any of the remaining dollars are to be used to resume suspended engineering projects there were delayed due to the department's lack of cash flow. The bill also allows NCDOT to request from the legislature $300 million in funds from the Savings Reserves Fund to aid with nationally-declared disaster relief. Lastly, the bill would authorize a $301 million loan to NCDOT for the 2019-2020 fiscal year to prevent delays in highway project management. The loan would have to be repaid by 2025 and include a detailed report of how the money was spent. Several members expressed concerns around the precedent that taking money from the General Fund and loaning it to subsidize an individual department would set for other state agencies.

The House moved forward with a mini budget to provide the funds included in the original budget for the state's Information Technology needs. HB 398: Info. Tech. Budget/2019-2021 Fiscal Biennium moved through the House Appropriations committee with little discussion but faced a fair share of pushback as it made its way onto the floor. Much of the debate surrounded the $20 million investment the bill makes to Montreat College, a private school, for its cybersecurity program and whether that investment should be made instead to the programs of state-funded public universities and community colleges. Despite an amendment proposed by Rep. John Autry (D-Mecklenburg) that would have moved the funds to the UNC School System, the bill still passed with the Montreat College funding intact and will now make its way over to the Senate. 

Over in the Senate, lawmakers introduced HB 377: Teacher Step Act which contains exactly the same language on salary step increases for teachers, as well as assistant principal and principal pay increases as the budget bill did. HB 377 would increase teacher, instructional support personnel, and assistant principal salaries based on years of experience, would authorize salary supplements for high-qualified North Carolina teaching graduates, and would provide a legislatively mandated pay increase for school principals. This bill only addresses the step pay increases and principal bonuses, which was a concern expressed by members throughout discussions of the proposal. Sen. Harry Brown (R-Onslow) indicated that another bill addressing raises for additional school personnel salary increases is in the works, but is still being negotiated. Some members of the Senate argue that given the fact that the language in the bill is the same language that was included in the budget, and increases in teacher pay are still being discussed, at the very least, this bill will help some teachers see a raise sooner rather than later. On the other hand, some members were concerned that the piecemeal proposal is leaving out important school personnel from the step increase and that the raises in pay are not enough. While the bill was up for debate on the floor Thursday afternoon, Sen. Dan Blue (D-Wake) assured members that conversations between him and President Pro Tempore Sen. Phil Berger (R-Rockingham) are, in fact, ongoing, and it is likely that there will soon be another bill that includes pay raises for all teachers and others that may have been left out of HB 377. Ultimately, the bill passed through the Senate and will be up for discussion next week in the House. 

Lastly, the Senate voted to send HB 231: UNC & Comm. Coll. Pay/Retiree Bonus over to the House to be discussed next week. The bill includes original budget bill language that provides salary increases to employees of the UNC system and the North Carolina Community College system. The bill will also provide one-time cost of living supplements for retirees of the Teachers' and State Employees' Retirement System, as well as the Consolidated Judicial Retirement System and Legislative Retirement System. 

Redistricting Reform

Bill Comparison Chart

The desire to discuss any one of the redistricting reform bills that have been filed this session has been growing throughout the year. Thursday, the House Committee on Redistricting was finally able to hear and discuss the similarities and differences between three of those bills and voice any questions or concerns still on their minds. The three bills that were discussed by the committee were:

• HB 140: The FAIR Act proposes a state constitutional amendment requiring an approval vote of the people that would establish redistricting standards, create a redistricting process to establish district by legislative act, and would authorize the legislature to create a redistricting commission for Congressional and legislative plans. 
• HB 69: Nonpartisan Redistricting Commission would establish a Nonpartisan Redistricting Commission that would be tasked with drawing Congressional and legislative district maps based on redistricting standards. The General Assembly would then consider and enact those maps. 
• HB 648: NC FAIR State & Congressional Districts Act would establish a redistricting process where a Special Master would first draw the maps based on redistricting standards, then would be voted on by an Independent Redistricting Commission before final enactment by the legislature.  

Largely, members of the committee expressed likes and dislikes about all three of the bills. Committee chair Rep. David Lewis (R-Harnett) emphasized his desire to do this right, not giving a timeline to when a bill of this nature may be ready to be voted on, but rather ensuring members that he is committed to continue working on this. Members of the committee also echoed one another's concerns about making sure that whatever the process may be, it is one that is transparent and collects feedback from the public. In a future committee meeting, Rep. Lewis plans to circle back on many of the questions asked by committee members during Thursday's meeting, such as, defining the terms "groups" and "communities of interest", determining if there should be a hierarchy of the redistricting standards in case there is conflict, and looking at examples of the methods being used in other states that may be different than the ones presented to the committee, to name a few. 

Upcoming Legislative Meetings

Monday, October 28

10:00AM: On-Site Wastewater Task Force

4:00PM Senate: Session Convenes

7:00PM House: Senate Convenes