DROWNING IN CASH: State leaders hold huge revenue surpluses

Jun 04, 2021

The legislature adjourned again this week with no state budget in sight. The House will begin formal Appropriations meetings next week with the goal of putting together its own budget, while the Senate has started chatter of mini budgets.

With the state drowning in cash from both a $4 billion revenue surplus and federal COVID relief funds, we're looking for a real budget this session that includes meaningful pay increases for all state employees and retirees – especially those at the UNC System, community colleges, and public schools who haven’t seen a raise in three years.

State leaders must also repay the State Health Plan more than $72 million it spent on COVID-related treatments and testing, which allowed the state to secure eligibility for $3.6 billion in federal relief funds.

On Feb. 11, the State Treasurer wrote a letter to the Senate Appropriations Committee requesting reimbursement to the State Health Plan for the $72 million spent in 2020 on Covid related expenses. He explained that the net impact of the fiscal year appropriation cut of $99 million becomes a $253 million negative impact to the Plan because the Plan operates on a calendar year.

SEANC is being reminded regularly that there is an abundance of one-time (non-recurring) funds, so it seems like the easy fix to the State Health Plan funding issue would be to use the one-time money to pay back the Plan.

Lawmakers have pointed out that the State Health Plan has a surplus and maybe the reimbursement is not necessary. The SHP Board of Trustees unanimously voted to “do the right thing” and use the Plan’s funds in order for the state to become eligible for $3.6 billion in federal relief funding. It is now time for the General Assembly to “do the right thing” and reimburse the State Health Plan using the non-recurring cash it has on hand.

The vigilance on the SHP’s budget by the State Treasurer’s Office should not be in vain. We don’t know what the future holds and with impending economic corrections, it is fiscally responsible for the state to replenish the State Health Plan. ­

SEANC Director of Government Relations Suzanne Beasley and Lobbyist Flint Benson break down the budget talks and look at other bills in this week’s Legislative Update.