North Carolina has faced intense pressure to repeal House Bill 2 from major businesses such as Apple and Facebook, but now it may lose billions of dollars in federal funding for passing the anti-LGBT bill.
The Obama administration is in the process of considering whether HB2 makes the state ineligible for federal funding for schools, highways, and housing, reports The New York Times. HB 2 bans transgender people from accessing public facilities like bathrooms and locker rooms that correspond with their gender identity, eliminates all existing LGBT-inclusive nondiscrimination ordinances in the state, and prohibits cities from adopting any new ones.
The Department of Transportation, the Department of Education, and the Department of Housing and Urban Development all told the paper that they are currently reviewing the law to determine whether the state will continue to be eligible for federal funding.
A spokeswoman from the Department of Education told the Times Friday that the department "will not hesitate to act if students' civil rights are being violated." Last year it provided the state with $4.3 billion in funding for kindergarden through 12th grade, and for colleges, reports the Times.
U.S. Secretary of Transportation Anthony Foxx is a former mayor of Charlotte. He told The Charlotte Observer that this bill "isn't who we are." The Department of Transportation currently provides around $1 billion a year in funding to North Carolina.
Foxx first told the Observer Tuesday that his department was reviewing the legislation to determine whether the state was in jeopardy of losing federal transportation funding.
The paper reports that it would "be a long process of negotiation," and "any decision on federal aid would take time." The Republican lieutenant governor and the president of the state Senate, Dan Forest, told the Times, “It would be wrong — even illegal — to single out North Carolina for unfavorable treatment."
“I’m confident that we will continue to receive this federal money despite the threats from a few in Washington, D.C.," he said in an emailed statement to the paper. On Tuesday, the Republican governor of North Carolina, Pat McCrory, accused critics of launching a "vicious, nationwide smear campaign" that "demonized" the state.
HB 2 has been widely condemned by LGBT and human rights groups, businesses leaders, and presidential hopefuls Hillary Clinton and Bernie Sanders, with many joining a social media campaign #WeAreNotThis to protest its passing.
The consequences to North Carolina, its economics, and its reputation as an inclusive state are piling up. The American Civil Liberties Union has filed a lawsuit. The entertainment company Lionsgate has relocated a television series. The mayor of Chicago, Rahm Emanuel, is asking North Carolina businesses to move to the Windy City in order to avoid controversy.
Even talk show host Seth Meyers took aim at the transphobic legislation, wondering how neither North Carolina nor Georgia, where the governor recently vetoed a so-called religious freedom bill after lawmakers approved it, did not learn a lesson from the disastrous blowback to the anti-LGBT legislation passed in Indiana last year.
Watch a video report below.