NC Republicans reach budget deal after agreeing to drop major casino expansion

GOP leaders of the North Carolina General Assembly announced Tuesday night they had reached a deal on the long-delayed state budget.

The compromise budget will not include casino legislation, the subject of a monthslong controversy between the chambers that appeared to derail negotiations last week and continued to be a sticking point up until Tuesday afternoon.

The nearly $30 billion spending plan, which lawmakers had intended to approve by the beginning of the new fiscal year on July 1, will now move forward with two-day votes in both chambers of the legislature on Thursday and Friday, after House Speaker Tim Moore and Senate leader Phil Berger said an agreement had been reached.

Berger, the chief proponent of the major expansion of state-sanctioned gambling, said Medicaid expansion will continue to be tied to passage of the budget, as lawmakers had originally laid out in March, when Gov. Roy Cooper signed an expansion bill into law.

The gambling bill, which would have authorized four new casinos and tens of thousands of video lottery terminals across the state, won’t advance at all right now, Berger said, adding that lawmakers could consider taking it up again during next year’s short session.

“This is the best, most prudent way for us to move forward,” Berger said during Tuesday’s impromptu press conference.

A draft of the budget, obtained by The News & Observer on Monday night, includes 7% raises for most teachers and state employees over two years, a reduction in the personal income tax rate to 3.99% by 2025, a major expansion of private school vouchers, and $500 million in funding for NCInnovation, a nonprofit that seeks to assist UNC System researchers create new businesses.

Moore confirmed, earlier on Tuesday, that many of those key provisions included in the draft obtained by The N&O would also be in the final budget, which Berger said would likely be released sometime Wednesday afternoon.

Casinos were a major sticking point

Tuesday’s announcement marks a major development in the prolonged budget saga that carried on throughout the summer.

Berger, Moore and other GOP lawmakers first began talking about potentially expanding casinos beyond tribal lands in June, and cited a Caesars resort casino currently under construction just across the state line in Danville, Virginia, as a strong incentive for North Carolina to consider opening more casinos of its own — to keep casino-goers, and the revenue and tax dollars they would generate, in the state.

GOP leaders from both chambers discussed and worked throughout the summer on a proposal to bring more casinos to North Carolina and to legalize and regulate 50,000 video lottery terminals, also referred to as video gambling machines, under the state lottery commission.

Berger repeatedly said he believed lawmakers were more likely to include the gaming proposal in the budget as opposed to introducing and running it as a separate bill that could be debated in multiple committees.

But opposition to the casino expansion grew, not only among Democrats, but also within the GOP’s own ranks. Local residents in counties that had been mentioned as possible sites for future casinos spoke out against the proposal and urged their representatives in Raleigh to reject the bill’s inclusion in the budget.

The House and Senate appeared to reach an impasse last week when Berger reiterated that the gaming bill would have to go into the budget and Moore said that 30 members of the House GOP Caucus had informed him they would not support a budget that included casinos.

Berger agrees to set casinos aside

Addressing the decision to leave casinos out of the budget and not pursue the gaming expansion at this time, Berger said he believed opponents of the proposal had ignored how much rural counties could stand to benefit from the revenue and jobs that major casinos and other commercial developments would create.

“It was just pretty clear that the facts were almost beside the point, as to what those proposals will do for rural areas,” Berger said. “And the emotion that was actually permeating every bit of discussion about that had sort of overtaken — I’ve learned that in an environment like that, you’re unlikely to make any progress.”

Berger also questioned why some supporters of other forms of gambling, including sports wagering and VLTs, had registered such robust opposition to casinos.

“There’s a whole lot of talk about, ‘We need to help rural North Carolina,’” Berger said. “But when we have a proposal that actually would create over 5,000 jobs, good-paying jobs in rural North Carolina, increase tax base in rural North Carolina, these same folks come out adamantly opposed to it.”

Asked if he believed advancing the gaming proposal as its own bill and letting it go through committees and the normal legislative process could have avoided any misunderstandings about the bill or increased support for it, Berger pointed to the sports betting bill as an example of a similar issue needing “multiple sessions” to advance.

“I do think that the important thing was, and is, to have public discussion, and for people to have an opportunity to know that it’s something that’s being considered,” Berger said.

“To the extent that that was not done, I think that could have prevented the bill from being successful,” he said, adding, “I’m not sure the legislative process itself would have improved the outcome.”