Falling Behind in NC, NC Budget and Tax Center

Budget Preview: More demand for health and human services budget, fewer dollars

Since the Great Recession and well-into the economic recovery, the state’s commitment to the well-being and safety of North Carolinians has wavered. The current FY2012-13 state budget provides the proof because it falls far short of investing adequately in the health, safety, education, and economic security of families and their children in the state. The budget’s shortcomings in the health and human services (HHS) infrastructure affect North Carolinians at nearly every life stage and can literally impact their longevity and vitality.

HHS funding aims to ensure that the state’s future citizens thrive early, seniors have access to quality and affordable health care, people with disabilities have the supports they need to contribute to their communities, and that food consumed by diners is safe. The HHS budget totals nearly $4.7 billion, making up 23 percent of the total General Fund budget. And, funding for this section of the budget is down by 8.3 percent compared to pre-recession levels (FY2007-08). The figures below highlight the top 3 ways the HHS budget is falling behind anticipated demand for services.

  • Early Childhood: State funding for child development—such as early care and education—has declined dramatically (34.3 percent) since FY2007-08 even though the population of children under the age of 5 will have grown by 13,000 by the end of this fiscal year. Waitlists for child care subsidies and early childhood education have grown longer as a result of funding cuts.
  • Aging and Adult Services: The state’s older population is growing fast, due to both the aging of the state’s Baby Boomer generation and in-migration of retirees. As a result, the demand for older adult services—such as in-home care and group meals, for example—is projected to increase by 24.1 percent. Yet, state funding for community-based services for senior citizens has declined by 6.6 percent since FY2007-08. **This does not include HB 5, temporary funding for group homes, because the Governor has yet to sign this piece of legislation.
  • Medicaid: The economic downturn prompted a dramatic increase (up 27 percent) in the number of individuals who are eligible for Medicaid because need is higher when people cannot find jobs and are pushed into poverty. Yet, the state’s share of funding for Medicaid declined by 6 percent over the same time, with less federal funding to make up the difference. As we indicated in this report, the current budget—and its massive cuts to the Medicaid programs—failed to fully address the Medicaid shortfall.

It will be important to watch these three major areas of the HHS budget. It will also be worth keeping an eye on the mental health section of the HHS budget. Per his State of the State Address, Governor McCrory vowed to support improvements in the state’s mental health system and called for the re-investment in drug treatment courts and services—which currently receive no state funding. The FY2011-13 budget eliminated the $2 million appropriation that covers staffing and operational costs for these courts and the FY2012-13 budget eliminated the $2.3 million appropriation that covers drug treatment services.

Further cuts to the HHS budget will only block the pathway to ensuring that North Carolinians are healthy, safe, and able to thrive.


  1. Alex

    March 5, 2013 at 2:12 pm

    There will always be more demand for free services than the amount of money actually available. This is hardly breaking news !

  2. Doug

    March 5, 2013 at 3:19 pm

    This will then follow the law of Government:
    1. Less of a good/service (think toilet paper in the now defunct USSR)
    2. Significant price increase (no example necessary, just look at any government program)
    3. Lower quality of product (think government cheese or school lunches…anybody want a part of that?)

  3. Doug

    March 5, 2013 at 4:20 pm

    Here is a link that should send shivers up your spine:

    Highlights of 2007 until now under our progressive dear leader:

    •Dow Jones Industrial Average: Then 14164.5; Now 14164.5
    •Regular Gas Price: Then $2.75; Now $3.73
    •GDP Growth: Then +2.5%; Now +1.6%
    •Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
    •Americans On Food Stamps: Then 26.9 million; Now 47.69 million
    •Size of Fed’s Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
    •US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
    •US Deficit (LTM): Then $97 billion; Now $975.6 billion
    •Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
    •US Household Debt: Then $13.5 trillion; Now 12.87 trillion
    •Labor Force Particpation Rate: Then 65.8%; Now 63.6%•Consumer Confidence: Then 99.5; Now 69.6
    •S&P Rating of the US: Then AAA; Now AA+
    •VIX: Then 17.5%; Now 14%
    •10 Year Treasury Yield: Then 4.64%; Now 1.89%
    •USDJPY: Then 117; Now 93•EURUSD: Then 1.4145; Now 1.3050
    •Gold: Then $748; Now $1583

    Amazing how far we have fallen under progressive rule!

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