GOP state budget preserves airport infrastructure spending, film grants

Jun 21, 2017 | Newsroom

The proposed final state Republican budget would provide money for upgrades to Piedmont Triad International Airport and new money to attract or retain film production in North Carolina.


The proposed budget, released Monday night, does not contain an N.C. Senate effort to repeal the state’s certificate-of-need law for medical facilities and equipment.


It also would spend more than $12 million to reduce by 400 slots those North Carolinians on a lengthy waiting list for additional intellectual and developmental disabilities services.


Senate Bill 257 is expected to be voted on this week by both chambers.


Democratic Gov. Roy Cooper said Tuesday that the compromise budget was worse than those passed by the individual chambers, calling it the “most fiscally irresponsible” budget he has ever seen. The N.C. House and Senate would need at least three-fifths support to override a Cooper veto of the budget.


The Republican budget compromise keeps nearly $14.3 million in state money for PTI. It represents a vast increase from the $500,000 in annual state funding for urban commercial airports in previous state budgets.


The money could be spent on capital improvements, or to pay debt services or other finance costs and expenses on revenue bonds and notes issued by airports.


Kevin Baker, PTI’s executive director, said the state’s airports provide a huge net financial contribution to the state’s economy and “this giant leap forward represents a very wise investment by the legislature in the airport system.”


“There are over 5,000 people employed at PTI at average wages 50 percent higher than average households’ (which could include two earners) income in the Triad,” Baker said. “Investment in our airport will lead to further employment opportunities for Triad residents, and economic growth for our community. We thank all of those legislators who had the foresight to lead and support this effort and look forward to making important improvements at PTI as a result of this funding.”


The budget compromise provides $15 million for film and production grant funding for 2017-18, as well as $31 million for 2018-19.


The 2016-17 state budget provided $30 million in grants, of which just $10.9 million has been designated to date. Currently, film companies don’t get any grant money upfront and must meet direct in-state spending requirements to qualify for it.


In contrast, Democratic-sponsored bills would have provided up to $55 million a year from the general fund.


Cooper’s budget provides tax incentives to the film and production industry, as well as $15 million toward the grant program to cover the second half of 2017. Cooper budget officials estimate the film tax incentive would have an impact of $20 million in fiscal 2018-19 and $40 million annually in future years.


The state Job Development Investment Grant fund would continue to contain $20 million annually for economic incentives as well as $35 million in a year with a high-yield project.


Such a project would require at least $200 million in capital investments be made by a recipient and at least 2,000 full-time or full-time-equivalent jobs created.


For a transformative project, which would require a $4 billion capital investment and 5,000 employee commitment, the state would provide up to $50 million for a single project. No more than $80 million could be provided annually for transformative projects.


The Golden Leaf Foundation would see its funding raised from $10 million to $17.5 million. The state projects receiving $127.2 million from the tobacco Master Settlement Agreement in each budget year, half of which had gone to the foundation before theGOP-controlled legislature began shifting most of the money to the general fund.



The budget compromise provides $12 million toward expanding the waiver slot by 400 for services for individuals with intellectual and development disabilities. The money would be available Jan. 1.


By comparison, the Cooper budget would provide $10.3 million in 2017-18 and $20.7 million in 2018-19.


The budget compromise sets aside $41.35 million in each budget year for state health regulators to purchase additional new or existing local inpatient psychiatric beds or bed days not currently funded by or though behavioral health managed care organizations.


The state would set aside $75 million toward expenditures required for the Medicaid waiver request submitted in June 2016 by the McCrory administration to federal regulators.


The Senate budget would have required the state’s certificate-of-need, or CON, law to sunset on Jan. 1, 2025. Several attempts by House and Senate Republicans to repeal the CON law, including SB324 and House Bill 640 in the current session, have failed to advance out of committee.


A certificate of need is required before a health-care system or provider can build a facility, buy equipment or offer a surgical procedure. The law took effect in 1978. The primary goal is to prevent unnecessary duplication of services within a community or region as a means of controlling costs.


A George Mason University study released in February 2015 lists North Carolina’s CON program as the third most restrictive of the 37 states with such regulations.


The limitations inherent in the program have helped fortify the revenue streams of not-for-profit health-care systems, such as Cone Health, Novant Health and Wake Forest Baptist Medical Center.


State Rep. Donny Lambeth, R-Forsyth, had said the CON language had “no chance” of being included in the final state budget. Lambeth is a legislative health-care expert and former president of N.C. Baptist Hospital.


The N.C. Hospital Association strongly opposes repealing the CON laws, citing the potential for losing 2,300 hospital jobs in rural areas of the state.


“In light of the continued uncertainty about federal changes to the health-care delivery system, coupled with the numerous mandates that the federal government places on hospitals, it is critical that our state officials focus on preserving the health-care safety net that hospitals and health systems provide to our communities,” NCHA spokeswoman Julie Henry said.



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