Last Thursday, Gov. Roy Cooper released his recommendation for COVID-19 relief spending, including the appropriation of over $4 billion in federal aid and $695 million in state funds to cover gaps in the federal relief. He followed the announcement with a press conference explaining the details of his proposal. The extra state money will be drawn from the over $5 billion in the general fund — essentially a financial cushion the state can use in emergencies.
The $4 billion figure comes from North Carolina’s allocation under the stimulus bill signed by the former president back in December 2020, but most of the money has very specific guidelines set by Congress, which dictate how the state can spend it. By contrast, President Biden’s $1.9 trillion stimulus proposal includes $350 billion to shore up revenue for state and local governments, which seems to come with fewer provisions on how it can be used compared with past stimulus bills.
Several Republican senators, who recently met with Biden, have proposed a much smaller stimulus, which completely removes the support for state and local governments. While Biden appears to be staying strong with passing his own proposal without Republican support, his proposal should frankly be commanding bipartisan approval among senators, including our own Thom Tillis and Richard Burr.
Leaders as conservative as West Virginia’s Republican governor, Jim Justice, have lauded the proposal, noting the serious financial limitations states are under due to the pandemic. In particular, due to high unemployment, states are having to dig into their unemployment insurance funds to cover checks. While Gov. Cooper noted the current strength of North Carolina’s fund when he proposed an increase in the state’s unemployment benefits, additional money from the federal government could help him win over Republicans in the state legislature, as few elected officials will refuse to spend money handed out on a silver platter.
Many students at NC State work outside of classes, and increasing unemployment benefits could keep them solvent through the rest of the pandemic. Indeed, Cooper’s proposal would indefinitely increase unemployment to a maximum of $500 per week for 26 weeks, up from $350 for 16 weeks. This boost, combined with the Biden stimulus’ $400 per week in federal unemployment benefits, would nearly recreate the $600 per week in extra unemployment passed under the CARES Act in March 2020.
Cooper’s additional spending proposal mostly consists of one-time bonuses to teachers, public schools staff and workers at UNC System schools like NC State. Additional funding could be used toward an additional bonus, or better yet, a raise. During his press conference, Cooper explained that, unlike other state employees, these folks have not received raises over the past two years. Educators and support staff are central to long-term economic growth for North Carolina, so granting them the same benefits as other state employees should be a no-brainer.
COVID-19 has hurt budgets both personal and governmental over the past year. While North Carolina at the state level has not experienced severe budget shortfalls, our economy is still far from full strength, and additional state revenue will assist us in growing out of the current slump. Moreover, “free” federal money will strengthen Gov. Cooper’s hand in budget negotiations for the next two years and potentially help our state return from the pandemic better than ever before.
