State budget negotiation mixing games of chance with health care



(The Center Square) – Contentious North Carolina budget negotiations include accusations of back-room deals, a fair amount of posturing and a change of course on a proposal to legalize casinos.

New legislation links Medicaid expansion to gambling.

The proposal to legalize four new casinos has fractured Republican majorities in both chambers that have successfully overridden 14 gubernatorial vetoes this session. House Speaker Tim Moore, R-Cleveland, said recently legalizing casinos lacks support from at least 61 House Republicans to pass the 120-member lower chamber, where the GOP occupies 72 seats.

The casino proposal, initially included in the budget, has since been removed and supplanted into a separate bill, House Bill 149, that ties Medicaid expansion – a top priority for Democratic Gov. Roy Cooper – to approval of casinos and video lottery terminals in hopes of courting support from Democrats.

All but eight Democrats in the lower chamber came out against the bill on Monday in an open letter that says Republicans “are cynically using health care as a political bargaining chip to force passage of a casino bill developed in secret and written by casino lobbyists.”

“We undersigned members of the House Democratic Caucus reject this kind of politics,” the letter read. “We are writing this letter to let Republican leadership – and the public – know we will not be bullied into blindly supporting this bill.”

The letter does not explicitly state Democrats who signed on would not vote for the legislation. The eight House Democrats who did not sign on include Reps. Kelly Alexander and Carla Cunningham of Mecklenburg County, Cecil Brockman of Guilford County, B. Ray Jeffers of Person County, Marvin Lucas of Cumberland County, Garland Pierce of Hoke County, Shelly Willingham of Edgecombe County, and Michael Wray of Northampton County.

Moore previously said around 40 House Republicans support casinos, meaning the proposal needs yes votes from about a dozen Democrats to pass. All 20 Senate Democrats signed a similar letter in opposition.

Republicans assigned conferees for HB149 on Monday to hash out the details of the casino, Medicaid bill, and all are Republicans. A draft of the legislation released to the media would authorize up to four new casinos in rural areas of the state as part of “Rural Tourism Incentive Program” that includes shopping and other entertainment.

HB149, first filed in February, was an “act to provide for remote charter academies and to provide a one-year extension of the virtual charter school pilot program” in its original draft. It later was amended to include the state community college system president’s confirmation by the General Assembly.

The conferees, as of midday Tuesday, were listed on the state legislative website as Sens. Brent Jackson, R-Sampson; Ralph Hise, R-Mitchell; Bill Rabon, R-Brunswick; and Lisa Barnes, R-Nash; and Reps. Jason Saine, R-Lincoln; Larry Strickland, R-Johnston; Allen Chesser, R-Nash; Jarrod Lowery, R-Robeson; Brenden Jones, R-Columbus; Reece Pyrtle, R-Rockingham; and Donny Lambeth, R-Forsyth.

“The purpose of this program is to encourage and promote tourism in rural counties on the state border and along major transportation corridors,” the bill reads. “The program will allow for gaming, which is a new and expanding component of the tourism industry and is currently allowed in North Carolina on certain Indian lands. As many contiguous states allow gaming, those industry business opportunities and employment opportunities are being lost to this state.”

Three casinos would be subject to property, population and other requirements that would limit sites to Anson, Bertie, Chowan, Edgecombe, Halifax, Hertford, Martin, Nash, Northampton, Rockingham, Tyrrell, Vance, Warren and Washington counties. A fourth tribal casino for the Lumbee Tribe of North Carolina could locate in either Bladen, Brunswick, Columbus, Hoke, New Hanover, Richmond, Robeson or Scotland counties.

Operators for the state casinos would be required to produce at least 1,750 jobs, invest at least $500 million, and gain approval from local governments, among other criteria. The bill establishes a 22.5% excise tax on gross gaming revenue that’s expected to generate about $200 million a year for the state and $40 million per year for local governments, according to analysis from legislative staff.

The North Carolina Secretary of Administration would be tasked with evaluating applications from casino developers, which would be required to pay a $500,000 application fee and $7.5 million proposal submission fee per site.

The bill also includes legalizing up to 35,000 video gaming terminals in the state during the first three years, then would authorize expansion up to 50,000. The terminals are expected to generate $208 million in new state revenues in the first year, and about $400 million by fiscal year 2027-28, according to the analysis.

HB149 would make Medicaid expansion, estimated to expand coverage to about 600,000, effective on the date the bill becomes law. The draft legislation has not been released to the public, and negotiations on the details continue, though House leaders have said a vote on the measure could come this week.

Senate President Pro Tempore Phil Berger, R-Rockingham, has pushed to include casinos in the budget and accused House leaders violated an agreement to do so. Moore has pushed back on whether a deal has been broken.

Cooper has used the occasion to slam Republicans on social media and in interviews. He’s threatened to veto the budget and says “people are right to be suspicious.”

When lawmakers passed and Cooper signed House Bill 76 earlier this session, it tied the expansion of Medicaid to the governor’s signature on the budget.



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