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Sunday June 26th

Medicaid expansion and teacher pay have held up N.C.’s budget. Why are they important?

North Carolina General Assembly building in Raleigh on Wednesday, Jan. 29, 2020.
Buy Photos North Carolina General Assembly building in Raleigh on Wednesday, Jan. 29, 2020.

CORRECTION: A previous version of the article incorrectly referenced an organization in a quote by English teacher Stu Egan. The quote should have referenced the American Legislative Exchange Council (ALEC), a nonpartisan, organization of state legislators that advocates for limited government. The story has been updated to reflect the change. The Daily Tar Heel apologizes for the error. 

In the midst of a budget impasse and political fights in the N.C. General Assembly, issues that affect everyday North Carolinians, such as Medicaid expansion and teacher pay, have yet to be resolved. 

The General Assembly has adjourned until April without passing a budget.

Governor Roy Cooper has been adamant so far that any budget he approves must include a Medicaid expansion, something Republicans have not been willing to do. 

Mitch Kokai, a senior political analyst at the John Locke Foundation, said there has been little movement toward a compromise. Kokai referenced a potential compromise proposed by N.C. House Republicans.

“It also has co-pays and a work requirement," Kokai said. "And that’s something that some House Republicans have signaled that they are interested in. We really haven’t heard whether there would be enough House Democrats to go along with that."

He said the Cooper administration initially seemed open to considering it, but ultimately refused because of the work requirements and co-pays.

Meanwhile, Cooper and Republican legislators have not managed to reach a compromise on teacher pay, where the proposed changes to teacher pay schedules between the two sides remain far apart.

Looking into the details of the Medicaid expansion and teacher pay policies reveal these programs have tangible effects for large populations of North Carolina. They also reveal deeper problems and issues within two crucial areas of a state’s policy.

Medicaid expansion: easy coverage for poor North Carolinians or expensive and inefficient?

37 states in the U.S. have voted to expand Medicaid coverage up to 138 percent of the poverty level with federal subsidies provided by the Affordable Care Act passed in 2010. Several of these states even did so under Republican control of their legislatures or governorships.

However, North Carolina has not, and doing so has become a prerequisite for Cooper to sign on to a budget passed by the General Assembly.

Suzy Khachaturyan, a policy analyst at the N.C. Justice Center’s Budget and Tax Center, said Medicaid expansion in North Carolina could mean healthcare coverage for up to 500,000 who still do not currently have it.

"It is an essential way in which states can not only provide people with health coverage but also boost their state economy and do a lot of meaningful things for people and families in their communities," she said.

Khachaturyan also said research she has done on expansion shows it will end up saving the state money due to a decrease in uncompensated care provided by doctors to poor patients, and will create new jobs for hospitals as more people are willing to seek care.

Republican resistance to budging on Medicaid expansion has centered on uncertainty that federal funds will be consistent year over year. Jordan Roberts, a health care policy analyst with the John Locke Foundation, said the price tag associated with expansion makes it unsound policy.

“It’s an expensive program. I mean, Governor Cooper’s budget, his projections are over the first two years it would cost just over $6 billion, for the federal state share, just for two years,” Roberts said. “It’s an expensive program, and regardless of how the state pays for it, we’re still going to be on the hook for that 10 percent share no matter how it’s funded if we choose to expand.”

In Cooper’s plan, most of the remaining 10 percent would come from assessments to hospitals and providers.

Roberts also said there is less evidence that the job creation numbers cited by Khachaturyan and Cooper will actually play out if Medicaid is expanded, saying that the model used to make an economic argument can be used to give positive numbers.

“What we’ve seen in other states is that advocates have promised the same exact kind of job numbers," Roberts said. "30,000; 40,000 new jobs and with the influx of new federal dollars this massive economic boom, but that just hasn’t borne out in reality. Some states have even lost hospital jobs, and states that have expanded Medicaid, they still have struggling rural hospitals, they still have hospitals that are closing down."

Khachaturyan pushed back on claims that the program is too costly for taxpayers, instead pointing to research she has done generally showing cost savings by expanding Medicaid.

“I actually found that it would save North Carolina a substantial amount of money, and that’s for a couple different reasons,” Khachaturyan said. “So most of the money that would fund Medicaid expansion would come from the federal government, so the remaining small state share would be covered primarily through an assessment on hospitals.”

Although 10 percent will come from the state, according to the N.C. Justice Center's Budget and Tax Center, 90 percent of the expansion costs would be covered by the federal government in the first two years.

Teacher pay points to larger education funding gap

The second main point of contention between the two sides has been teacher pay. The Governor’s proposal and those put forward by Republicans have been quite far apart on how they would alter the current teacher pay schedule, with Cooper including higher pay raises for veteran teachers with over 15 years of experience.

Terry Stoops, vice president of research and director of education studies at the John Locke Foundation, said the two sides have not been able to agree on teacher pay in a bill separate from the overall budget. However, he said he did not think there would be significant fallout from the lack of an agreement.

“I don’t know that the failure to pass a teacher pay increase in this budget would necessarily lead to teachers leaving the classroom, and it’s not even clear how many teachers are aware of the dispute that’s going on in Raleigh,” Stoops said.

He also said that, overall, teacher pay has increased over the last several years.

“Teachers have been fortunate that over the last five years they have received pay increases from the General Assembly,” Stoops said. “If you look at average teacher pay between 2014 and 2019, it’s a 20 percent increase to the current level that it’s at.”

He said he thinks North Carolina is on a trajectory toward becoming competitive in the southeast regarding teacher pay.

However, Kris Nordstrom, a senior policy analyst at the North Carolina Justice Center, said these increases to teacher pay don’t account for inflation. He said an unchanged starting salary, as proposed in the budget Cooper vetoed, means that salary is worth less than it was a couple years ago. Nordstrom noted that overall, good strides have been made over the last couple years.

“The state has made decent progress in trying to increase teacher pay at a decent rate over the last two or three years, but we’re starting from a low starting point,"  Nordstrom said. "So, do we give the General Assembly credit for trying to fix a problem they themselves created?”

Stu Egan, a high school English teacher at West Forsyth High School in Clemmons, North Carolina, said only focusing on average salary distorts where the changes in teacher pay are actually occurring.

“What this General Assembly has done, mostly, when they say they raised the average teacher salary by a certain percentage, it means they could have raised people at the lower end of the salary range more than they have for veterans like myself,” Egan said.

The proposed conference budget does show a plateau in teacher pay at around the 15th year of service.

Egan also said since 2014, he and other veteran teachers haven’t received longevity pay, something all other state employees receive.

“Overall, I’m kind of losing money,” Egan said.

Nordstrom said regardless of what may or may not be passed on teacher pay, it will not fix an overall funding deficit for teacher pay in the state. He said his analysis of funds that actually go toward increasing resources for students shows an investment that falls far short of what’s needed.

“When I looked at the conference budget, it was about $35 million. Which, when you have 115 school districts, 1.5 million students, that’s not much money,” Nordstrom said. 

He said this amounted to about $15 per student.

Egan said he thinks this is not an accidental policy, but rather one that is meant to aid private interests, such as those of the American Legislative Exchange Council (ALEC), a nonpartisan, organization of state legislators that advocates for limited government.

“North Carolina is probably one of the biggest petri dishes for ALEC-mandated bills that promote privatization of education,” he said.

@DTHCityState |

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