GOP budget negotiations have stalled over Medicaid. Why lawmakers say it’s not over.

State budget negotiations between Republican leaders in the General Assembly are stalling out, meaning that lawmakers could go home next week without passing a bill giving state employees and teachers new raises.

Medicaid expansion and failure to pass a sports betting bill are among the issues causing the divide. Republicans control both the House and Senate but that doesn’t mean they agree on everything, and this year’s budget process has been focused on intraparty divisions rather than between the legislature and Democratic Gov. Roy Cooper. At least so far.

Rep. Jason Saine, a Lincolnton Republican, told reporters Thursday morning that budget negotiations between the chambers are breaking down.

“A lot of these things are intertwined,” he said on the House floor after session. “There were certainly senators who wanted to see this [sports betting] bill passed. Their appetite for helping House members now just got a little less. With Medicaid expansion also looming in the conversation, it’s my understanding those conversations haven’t gone very well either. So we very potentially could walk out next week without a budget,” Saine said.

Saine noted, as have House Speaker Tim Moore and Senate leader Phil Berger, that the 2021 budget bill Cooper signed into law in November was a two-year spending plan. That included funding for 2.5% raises for state employees and an average of 2.5% for teachers this coming year, as well as tax cuts and money for capital projects. But the state is also sitting on a more than $6 billion revenue surplus and inflation is making everything cost more, from supplies for those infrastructure projects to need for higher wages.

Medicaid expansion a dealbreaker?

“We have a two-year budget. I think the House position, at least as chairman of Appropriations, my position all along has been we’re OK if we don’t get a budget this year. There’s nothing that I have to have immediately, and I think the state will still be in a good place. We would like to get those raises to our employees. It’s been a priority of the House. But if someone’s put a line in the sand, we can’t go there, we might just have to walk out,” Saine said.

That line in the sand is a couple things, he said, including Medicaid expansion. The Senate passed a comprehensive health care bill earlier this session that included expansion, but the House maintained its disinterest. Until Wednesday night, when Moore revealed a new bill that would create an oversight committee and multi-step process before taking a vote on expansion in December. But the Senate isn’t interested in that, either.

Moore and Berger are set to meet again on Thursday and probably over the weekend. Then, when and if they agree on a budget bill, they’ll meet with Cooper.

The House has dug in on keeping Medicaid expansion out of the budget.

“House Appropriators are not putting that in the budget,” Saine said. “If that becomes what it has to be, that’s probably where we walk away.”

Berger doesn’t see the House’s Medicaid expansion bill as the “pathway” to expansion.

“So we’ll see what they do. We’ll see what happens over the next several days,” he said about further discussions.

“I’d like to see it in the budget, but I can accept us doing a budget that doesn’t have it. It’s not a dealbreaker for me,” Berger told reporters on the Senate floor after its session Thursday.

Berger acknowledged that Medicaid expansion could pass as part of a separate deal.

Another mini-budget summer?

Passing small budget bills, as Republicans did during the 2019 budget stalemate with Cooper, could happen again this year. Saine said it was possible, and Berger also mentioned it.

Berger said “there are a lot of things we disagree about” in budget negotiations between the House and Senate, but he doesn’t think negotiations are breaking down. He said Saine wasn’t in the room when he met with Moore.

“I still feel like we’ll have something to vote on next week,” Berger said.

Whether that happens, and is passed and sent to Cooper and Cooper signs it is a very short timeline. Berger said it depends on how meetings go, though he’d like to end the session next week. He said it doesn’t look like the “runway is long enough” to do what they want to do.

“If we don’t get a traditional (budget) passed and enacted into law, I think there are other things we need to do. We’re probably back in mini-budget territory,” Berger said.

House budget leaders haven’t decided what mini-budgets might look like yet, or if they’ll happen at all or when.

“We are 100% advocating for pay raises for teachers and state employees, and also our retirees on a fixed income,” Moore said Thursday. “I believe we’re going to adopt a budget. But is it 100% guaranteed? No it’s not 100% guaranteed.”

Saine said he thinks it will take “a little time and pressure for members to decide what they want to do.”

“Right now they’re not feeling it, because we haven’t had a vote. We haven’t gotten to the end of the clock, as it were,” Saine said.

“If you asked me a week ago I’d say the prospects were about 75% that we were going to get a budget. (Now) I’d put it, I don’t know, more like 50-50,” he said. “It’s not over. It’s just not on the calendar we hoped for.”

Saine reiterated that budget writers won’t reveal the amount of additional raises for state employees and teachers until the bill is ready.

“It’s significant and would be significant to our employees, and we really want to get that to them. That’s why I think it’s a shame that we’re using a big policy move to hold these people hostage and to not pay them something that I think they deserve, and we certainly have the money for,” he said.

Moore told reporters early Thursday that Medicaid expansion isn’t the only thing that lawmakers disagree about and are discussing.

“We’re still talking. As long as we’re talking, things are good,” he said.

“We generally always get this done. It’s not our first rodeo,” Moore said.

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