New Report Highlights Urgent Need for Federal Relief in N.C.

North Carolina will face massive health, education and economic hardships unless the federal government acts quickly to extend  relief, a new report says, as households statewide are increasingly unable to afford basic necessities such as food and rent. 

The analysis, released Tuesday by Center on Budget & Policy Priorities, illustrates the staggering need that has arisen across the state in the face of COVID-19, with families facing shortages in education, employment, housing, and health care.

The report came as Treasury Secretary Steven Mnuchin and White House chief of staff — and former U.S. Rep. of the N.C. 11th congressional district — Mark Meadows hosted a closed-door GOP lunch Tuesday to brief Republican senators, including Richard Burr and Thom Tillis, on the party’s relief plans for states.

A call for federal relief

Last week Gov. Roy Cooper urged the state’s congressional delegation to act quickly to offset a projected $5 billion decline in local and state revenue due to COVID-19 and the resulting economic shutdown. The Senate recently returned from a break to resume discussions over the HEROES Act, a proposed $3-trillion care package that was approved by the House in June. 

In a letter to members of the delegation published last Thursday, Cooper requested “robust and flexible” funds to allow state and local governments to address a litany of issues including protections for students and teachers returning to school, continued expansion of federal unemployment benefits and more.

Without relief from the federal government, the governor warned, the state would not return to estimated 2020 revenue levels until 2023, “even assuming the eradication of COVID-19 in the near future.”

The long-term revenue shortfall would ripple through the state and local economies, the CB&PP analysis cautioned, with dire consequences for North Carolina’s population.

Addressing the report for NC Policy Watch, Director of the NC Budget & Tax Center Alexandra Sirota wrote, “As members of our North Carolina congressional delegation return to Washington to develop additional responses to COVID-19 and its public health and economic impacts, it’s essential that they closely examine evidence of the devastation the pandemic is wreaking here … and shape a legislative response accordingly.” 

Unemployment extensions a key factor in negotiations

Hardship is high among N.C. families, the CB&PP analysis also reported, as many earners have either lost their jobs or seen earnings fall. At the same time, one in five North Carolinians are behind on rent, and as of Monday, eviction hearings have resumed in Mecklenburg County. 

“While many jobless adults qualify for unemployment benefits, some do not,” the report stressed. 

North Carolina’s continued budgetary woes have left the unemployment safety net particularly fragile, The Winston-Salem Journal reported. As of Monday, more than $6.1 billion in state and federal unemployment insurance benefits have been paid in North Carolina, the state Division of Employment Security (DES) disclosed. 

According to DES, 75.5% of unemployment-insurance payments to North Carolinians are coming from federal sources, primarily the additional $600 weekly benefit. Without action from congress, those federal benefits will expire at the end of the month.

On Wednesday, Republicans had called for the $600 extension to be slashed to $100. On Thursday, Mnuchin told CNBC that Republicans have agreed on a plan that would provide 70% of a worker’s normal income through unemployment. As negotiations continue, however, it’s become unlikely that a new plan will be approved before August. 

The pandemic wreaks havoc on N.C. households

According to the CB&PP report, N.C. households are further stressed by rising food costs as children are staying home and missing out on meals at school, summer programs or child care.

The analysis reported that 713,000 households, including 522,000 children, didn’t have enough food to eat from June 29 through July 7, while the number of households receiving food assistance from February to May this year increased by 13%. 

Meanwhile, a group of  North Carolina leaders, including Asheville Mayor Esther Manheimer, Kinston Mayor Don Hardy, Lexington Mayor Newell Clark and Salisbury Karen Alexander, met Tuesday to discuss the dire consequences for the state if it does not  receive $1 trillion in aid from the next coronavirus stimulus package. 

As statewide coronavirus cases reached 102,861 on Tuesday, the mayors called on the U.S. Senate to immediately take up and pass a relief bill that would provide unrestricted federal aid that would allow states, cities and towns to reopen their economies, WBTV reported. 

The U.S. Chamber of Commerce had previously weighed in, publishing a letter last week that urged the Senate to quickly pass state and local aid to prevent massive layoffs and cuts to vital public services.

“Hardship left unaddressed will stall our recovery, worsen health, education and economic outcomes for individuals and communities and signal a rejection of the humanity of all people across North Carolina” Sirota wrote, summarizing the CB&PP’s report. “It is time for the Senate to act.”