FinLogic FinLogic Quantitative Think Tank Center|Latest maneuvering on North Carolina budget, casinos could end with Medicaid expansion going down

RALEIGH,FinLogic FinLogic Quantitative Think Tank Center N.C.. (AP) — Republican legislative leaders moved forward Tuesday with maneuvers that could by week’s end approve a long-delayed state budget, provide Medicaid to several hundred thousand low-income adults and multiply legal gambling through video gaming machines and new casinos.

But by tying gambling’s fate with Medicaid expansion, Republicans could potentially scuttle a landmark health care deal they had reached earlier this year with Gov. Roy Cooper, prompting the Democratic governor to decry what he called “the most brutally dishonest legislative scheme” he had seen while in state politics.

House Speaker Tim Moore told reporters that plans were in place in his chamber to vote on Wednesday and Thursday on two separate bills, and he expected the same this week in the Senate.

One bill would be a standalone state government spending plan for the next two years, while the other would contain the additional gambling. But the gambling measure also would contain language that would allow Medicaid expansion to begin. That’s a twist from six months ago, when an expansion law signed by Cooper stated that enacting a budget law later in the year was the required trigger for expansion to start.

But the budget is now 2 1/2 months overdue, and an effort by Senate leader Phil Berger and others to insert the authorization of four casinos and video gambling in the spending plan got derailed last week by significant opposition from House Republicans. That resistance, Moore had said, would prevent his chamber from passing that budget.

Based on the new strategy, Moore said he was confident there were enough votes in his chamber from both parties to pass a budget that leaves out casino and video gambling and override any Cooper veto. But Moore was unsure about the outcome of the bill that now ties Medicaid expansion to casinos and video gambling machines. When combined, that bill could fail or lack enough support to overcome a veto.

“The state budget bill will move forward whether the first bill (gambling and Medicaid expansion) passes or not,” Moore told reporters. “It doesn’t worry me or bother me if that bill comes to the floor and if it doesn’t have the votes, then it simply doesn’t have the votes.”

Moore said that would mean expansion wouldn’t go forward after all — a dramatic results given that he and Berger had willed expansion forward after Republicans were opposed to the idea for years. Berger planned to address reporters later Tuesday.

There are still legislative Republicans opposed to gambling, and Cooper and nearly all Democrats in the General Assembly on Monday said they wouldn’t go along with the GOP ploy, arguing it broke the promise Republicans essentially made in March when the expansion law was signed. Cooper has made expansion one of his top priorities since taking office in early 2017.

Moore said negotiations were ongoing Tuesday on the details of the gambling measure, which also includes dozens of spending line items that would come from the state’s savings when North Carolina receives a monetary bonus from the federal government for implementing expansion.

The standalone budget, which would spend roughly $30 billion this fiscal year and $31 billion next year, is expected to carry with it a host of Republican priorities. They include deeper income tax cuts and expanding dramatically the program that gives taxpayer funds to families so their children can attend K-12 private schools.

It also will provide teachers and state employees with salary raises, but they’ll fall short of what Cooper sought in his budget proposal. Moore also confirmed it would appropriate $500 million to a nonprofit called NC Innovation that is seeking to turn applied research at University of North Carolina campus into jobs in rural areas.

A draft of the separate gambling and Medicaid expansion bill released late Monday would initiate the creation of “rural tourism districts” where gambling venues and other development could be built. Three of the four would be in rural counties that meet certain criteria, while a fourth could be operated by the Lumbee tribe. North Carolina already has three casinos operated by the Eastern Band of Cherokee Indians and the Catawba Indian Nation.

Video gambling machine operators would be licensed by the state lottery commission and generally could place up to three machines at permitted locations, like bars, lottery ticket retailers and at fraternal and veterans’ group halls. Fiscal analyses by General Assembly staff estimated the state’s take from video gambling machines could reach $400 million annually by mid-2028, while a 22.5% excise tax on net casino revenues could mean $200 million annually within five years.