Advocacy Update: June 9, 2020
Legislators back in Raleigh to Work on State Budget – Face $4-5 Billion Shortfall
State legislators are back in Raleigh to try to develop a State Budget in the face of a global pandemic and the economic hardships it has caused in North Carolina, including a projected $4-5 billion revenue shortfall. With such a steep and sudden drop-off in state revenue coming into the State due to job losses, business closures, stay-at-home orders, etc., legislative leaders have said their top priority is to prevent state employee layoffs and major cuts like those seen during the “Great Recession” a decade ago.
In addition to other objectives on its 2020 Legislative Agenda (see complete Agenda below), NCLCCA will be working in the General Assembly to prevent cuts to child care programs like those being seen in Georgia, which is facing a similar state revenue shortfall. Fortunately, the General Assembly has directed a lot of money in recent years into a reserve fund called the “Rainy Day Fund” for hard economic times, which has a current balance of $1.2 billion. The General Assembly also still has access to nearly $2 billion in federal funding sent to North Carolina through the CARES Act passed by Congress to help address the impacts of coronavirus.
Together, the Rainy Day Fund and federal CARES Act funding should help address North Carolina’s budget shortfall, but they won’t likely plug all the holes. There are strings attached to the federal CARES Act funding, for instance, that restrict its use at the state level. And state legislators are not likely to wipe out the Rainy Day Fund balance just as hurricane season starts.
What Does this Mean for Child Care?
Because state revenue has dropped off so drastically, NCLCCA will need to focus its efforts on preserving current child care funding (Subsidy and NC Pre-K) through the use of both state and available federal funds, working to secure whatever federal funding is available now or later this summer to help licensed centers address the impacts of the coronavirus pandemic. The following member-driven Legislative Agenda has been set by the NCLCCA Board of Directors with input from The Advocacy Council:
NCLCCA Tracking Child Care Bills
In addition to its work related to a State Budget, NCLCCA is monitoring legislative activity and tracking child care-related bills so child care providers know what’s happening that could impact their businesses and when and how to weigh in with state legislators to try to influence outcomes. In the first few weeks of the legislative session, the following bills are on the NCLCCA radar:
Senate Bill 791 – Funds for NC Pre-K would appropriate to DCDEE $180 million in recurring funds for the 2020-21 fiscal year to “provide additional funds for all income-eligible four-year-old children in this State to participate” in the NC Pre-K program. It would also appropriate $20 million in recurring funds for the 2020-21 fiscal year to DCDEE “to incentivize higher pay for NC Pre-K teachers,” but it is unclear how the legislation would accomplish this as currently written. In fact, the way it’s currently written doesn’t even make sense.
NCLCCA Position: Monitoring.
With such a large price tag and without bipartisan support, this bill is not likely to advance at this point. However, NCLCCA will be reaching out to some of the bill’s sponsors to inquire about the legislation, particularly the part about NC Pre-K teacher pay that is confusing.
House Bill 1117 – “Protect Child Care Workers/COVID-19 Pandemic” would allocate more than $121 million in federal CARES Act funding (from the legislature-established “Coronavirus Relief Reserve”) to DCDEE to be used for the following purposes:
The bill would also appropriate additional “non-recurring” money to fund two weeks of paid sick leave for teachers and staff providing care during the pandemic.
NCLCCA Position: Monitoring. (Some of these objectives are on the NCLCCA Agenda.)
House Bill 1117 is not likely to advance right now because it allocates federal dollars that legislative leaders have said they will not spend until they receive clarification from the federal government about whether they can use it to replace lost state revenue to prevent budget cuts. It would also need bipartisan support to pass (sponsors who are from both political parties).