By Natalie Anderson
natalie.anderson@salisburypost.com

SALISBURY — Though $5.7 billion in federal funds can go a long way to supplement the state’s budget surplus, local lawmakers say the state must remain strategic and careful with how expenses are funded.

Gov. Roy Cooper on Wednesday unveiled a list of proposals for North Carolina’s $5.7 billion share of the latest federal COVID-19 relief funds from the $1.9 trillion American Rescue Plan passed by federal lawmakers in March. Calling it a “once-in-a-generation opportunity” to make transformational changes, Cooper’s proposals include $1.2 billion for broadband installation, $277 million for capital projects, $835 million for new university and community college scholarships for in-state residents from low- to moderate-income families, $300 million for teacher development and the expansion of preschool, $350 million for the tourism/hospitality industry and small businesses and $800 million for wastewater and drinking water system repairs.

Half of the state’s share was received this week, with the remaining half expected next spring. All funds must be used by 2026.

Rep. Wayne Sasser, a Republican who represents Rowan and Stanly counties, concurred with Cooper on the lifetime opportunity to use the “train load of dollar bills.”

“I’m never going to see another opportunity in our lifetime to have that kind of money to spend,” Sasser said.

But he cautioned against spending too much of those one-time funds on recurring expenses that would require lawmakers to pull from the state budget after federal funds are exhausted. While federal funds are ideal for water, sewer, road and broadband projects, those funds shouldn’t be used for salary raises for educators and state employees, he added.

Sen. Carl Ford, R-33, said lawmakers must be careful with implementing raises because each additional percentage point can add up to $1 billion more per year in perpetuity, which is why lawmakers in past years have concentrated on smaller raises and supplemental bonuses.

In his 2021-23 budget proposal, Cooper called for $27.4 billion in spending for 2021-22 and $28.5 billion in 2022-23. He proposed a 10% raise on average for K-12 teachers, with non-certified school personnel earning $15 an hour. He proposed investing $78 million in early education and child development and $80 million to hire more school nurses, counselors, psychologists and social workers. Additionally, he proposed investing nearly $1.4 billion in 2021-22 and at least $1.9 billion in 2022-23 to improve pay, provide bonuses, implement a new pay plan and continue benefits for state employees and state-funded local employees, with cost-of-living adjustments and bonuses for state government retirees.

The House and Senate both unanimously passed Senate Bill 172 on Thursday. That bill establishes various reserves and funds to funnel federal COVID-19 relief dollars across the state. It includes $3.26 billion for elementary and secondary schools, $19.85 million for YMCA centers, $556.61 million in emergency rental assistance, $805.77 million for child care grants, $701.28 million for higher education institutions and $315.9 million for expanded school and community health center vaccinations and COVID-19 testing. Emergency rental assistance was also allotted to the state’s regions, with Rowan sharing $56.77 million with Anson, Iredell, Lincoln and Stanly counties. The bill also calls for any unspent funds returned to the state’s Coronavirus Relief Fund, with up to $10 million to be allocated to the Department of Public Safety, Division of Emergency Management, and an extension of the Extra Credit Grant Program for families with qualifying children.

Additionally, House Bill 947, which passed the House but has yet to be taken up in the Senate, allocates $350 million to the Growing Rural Economies with Access to Technology, or GREAT, program and $400 million for places not included in the program but still in need of broadband infrastructure.

Rep. Harry Warren, R-76, praised the state’s financial standing both now and before the pandemic, adding the state had at least $1.5 billion in reserves even after writing checks for back-t0-back hurricanes in 2018. He credits the surplus to tax reforms passed by Republicans in 2013. Ford credited Republicans for a decade of proper spending and tax cuts.

But Warren said the state must be financially prepared for another COVID-19 surge, for example, or future natural disasters.

Local lawmakers say most 2021-23 budget discussions at this time remain between House and Senate leaders and appropriations chairs. But while the inability to finalize a budget for 2019-21 resulted from an impasse between the Democratic governor and Republican majority, the hurdle may come down to a disagreement between House and Senate leaders on how much should be spent.

Warren said he sees more bipartisan agreement for the budget because both Republicans and Democrats are proposing increases to spending. Sasser said he doesn’t expect as much contention since “everybody is going to get some” funding.

At this time, it seems that around $500 million stands in the way of an agreement, with the Senate proposing a smaller budget than the House, Warren said.

Warren added that he is currently focused on a few appropriations bills that he plans to include in the budget. He hopes to get funding for various priorities in Rowan County including local fire departments and dental assistance for the uninsured and underinsured.

“I’d hate to see us have a well-worked budget and have it vetoed again,” Warren said. “We just can’t afford to do that.”

Rep. Julia Howard, a Republican representing Rowan and Davie counties and former House Finance Committee chair, did not respond to a request for comment by time of publication.

Contact reporter Natalie Anderson at 704-797-4246.