Republican Gov. Pat McCrory issued a memorandum this afternoon to state agencies directing them to stop salary increases and send extra dollars to the state Medicaid office to offset an anticipated budget shortfall.
McCrory’s memorandum came with a critical reference to his predecessor, former Democratic Gov. Beverly Perdue, and how her office dealt with Medicaid shortfall issues by adjusting the budget.
“It is time to solve the mess, not kick the can down the road and manipulate the budget as was done in the past,” McCrory said, according to a written statement. “It stops now.”
The state is anticipating $70 million to $130 million more in expenses for Medicaid in the current fiscal year, which ends June 30, than the $13 billion budgeted by the state legislature.
McCrory also indicated in the memorandum that state revenue was up by $100 million, removing most of the sting out of the anticipated shortfall.
But he still called on state agency heads to hold off on salary promotions, be mindful of travel expenses and review contracts with companies and non-profits.
Medicaid, paid for with federal and state dollars, pays for medical care for the state’s poorest and most vulnerable citizens, including low-income children, disabled persons and some elderly.
The Republican-led state legislature and McCrory recently opted not to expand Medicaid program in the state, which would have extended health insurance to 500,000 poor North Carolinians currently without insurance.
The Medicaid expansion was the one component of the Affordable Care Act, a.k.a. Obamacare, that the U.S. Supreme Court found was not mandatory under its ruling, offering states the option to opt out. When McCrory signed the bill into law last week, North Carolina joined 13 other states that have opted out of the additional coverage. Other Republican governors, including Chris Christie of New Jersey, have signed up for the expanded coverage despite voicing criticism in the past about the federal health care program.
One of the main reasons given by McCrory and legislative leaders not to expand Medicaid has been a January audit released by Democratic State Auditor Beth Wood’s office that found the Medicaid program was not able to accurately forecast its needs, and increased need for the mandatory benefits exceeded what the state legislature allotted for the program by as much as $1.4 billion (the cost was shared by the federal and state government).
Under Perdue’s administration, the budget was adjusted to account for the additional expanses of the program that has mandatory coverage requirements.
It’s not clear whether McCrory, as part of his directive in the memorandum, will seek to rescind the salary increases he gave several of his Cabinet secretaries and staff members when he took office.
A call to McCrory’s budget director Art Pope seeking comment and clarification was not immediately returned.
The memorandum calling for salary freezes also comes the same week the N.C. State Board of Education heard that teachers in the state are among the worst-paid in the nation, and that a teacher with a bachelor’s degree would have to work for 15 years before making $40,000 a year.