LEGISLATIVE UPDATE: State must invest huge revenue surplus in public services

Feb 24, 2023

The state is on track for a massive $3.25 billion surplus in revenue this year, according to a recent forecast from the General Assembly staff and Gov. Roy Cooper's office, giving lawmakers more money to provide much-needed raises for state employees and retirees.

The state currently has almost $6 billion in reserves. It needs to invest now in public services to recruit and retain employees. State government is experiencing a 20% vacancy rate, with some prisons and DHHS facilities seeing a much higher number.

Cooper is expected to announce his budget proposal in the coming weeks. House Speaker Tim Moore told the News & Observer Thursday that he hopes to have a plan voted through the House by Easter, adding to the likelihood that a budget passes into law by the start of the new fiscal year on July 1.

The article points out that the two main issues may be tax cuts and raises for state employees. Both Moore and Berger said pay increases could make a difference in vacancy rates. No details were given on the size of the raises the two chambers are considering.

Sen. Ralph Hise's bill to remove state employees' right to have their association dues and other payments deducted from their paychecks (Senate Bill 87) remains in the Senate Rules Committees and has not been calendared.

Also this week, the State Health Plan Board of Trustees heard a presentation from Aetna, which has been awarded the administrative contract for the Plan beginning in 2025. The company promised careful attention and pledged to hold down prices. It also plans to build a robust network of providers to allow Plan members to keep their doctors.

State Treasurer Dale Folwell told Aetna representatives there is "no room for error" in implementing their processes.

SEANC board calls on SECU to rescind risk-based lending plan

The SEANC Board of Governors approved a resolution this week calling on the board of the State Employees’ Credit Union to rescind its plan to move to risk-based lending on March 1.

The credit union, which was founded to serve the interests of state employees, is making several huge changes to its business practices. SEANC Past President Shirley Bell and former State Employees’ Credit Union CEO Jim Blaine visited the SEANC board’s meeting last week. Currently, as it has since it started, the credit union treats each member the same when it comes to interest rates and loans. Approvals are based on many different factors rather than just a credit score.

This new risk-based lending strategy will factor in credit scores more heavily and split applicants into tiers based on their scores, similar to a bank. Those with lower scores will pay higher interest rates and be more likely to be denied a loan.

Blaine gave an example of a person with a lower credit score paying $2,000 more for an $18,000 car loan than an applicant with a higher credit score. The SECU board is meeting today.