2017 Fiscal Year State Budget, NC Budget and Tax Center

Initial review of the state House leadership’s Health and Human Services Budget

Budget subcommittees are meeting today to go over their respective proposals for the upcoming 2017 Fiscal year. House leadership is not expected to release their full budget, tax, and compensation package until next week.

Health and Human Services

This area of funding aims to ensure that the state’s young citizens thrive early, older adults and vulnerable populations have access to quality and affordable health care and social services, and people with disabilities have the supports they need to fully engage as citizens and contribute to their communities.

The House’s proposed budget on health and human services is able to make investments in targeted programs and services in large part due to a $318 million reduction in Medicaid costs. These savings are resulting from lower enrollment and utilization. The proposal does the following key things:

Medicaid

  • Includes $318.5 million in savings due to lower enrollment and utilization costs in the program. An improving national economy and recent policy decisions like cutting reimbursements, raising copays, and eliminating optional services over the years are likely contributing to lower enrollment and utilization.
  • Provides $1.5 million to support Alzheimer’s patients and their families by creating additional slots for the Community Alternative Program for Disabled Adults.
  • Provides $3.7 million to increase RN rates for Community Alternatives Program for Children services to the rate that is in effect for private duty nurses.
  • Provides $4.1 million for the projected increase in the number of individuals receiving state-county special assistance due to the increase in the income eligibility level.
  • Provides a one-time $1.25 million appropriation to fund a Medicaid analytics project.

Early Education

  • Provides a $4 million appropriation to the NC pre-k program, restoring 800 slots for at-risk children. More than 6,000 children will remain on the waiting list.
  • Relies more on federal block grants to fund the NC pre-k program, which frees up 4.2 million state dollars.
  • Provides $3.45 million to increase the child care subsidy market rate for children ages 3 to 5 in Tier 1 and 2 counties, which are the most economically-distressed counties in the state.

Social Services

  • Provides a one-time $8.4 million appropriation and a recurring $167,083 appropriation to implement the Program Improvement Plan for child welfare. The goal of the plan is to enhance children’s safety while keeping families together and reducing the likelihood of children entering into foster care.
  • Provide $600,000 to promote food and nutrition service outreach to help ensure that older adults who are Medicaid/Medicare (dual eligibles) receive the benefits for which they’re eligible.
  • Provides $60,000 to fund 3 additional positions to ensure timely review of child fatalities.
  • Provides $1 million for the Children’s Angel Watch Program, which is a foster care program for children who are age 0-6 (with siblings up to age 10) who are not in the custody of the Department of Social Services and whose families are temporarily unable to care for them because of a crisis.
  • Provide $3.75 million to increase the State-County Special Assistance rate for Adult Care Homes.
  • Creates a one-time $300,000 grant to create jobs for people who are chronically unemployed and fund staff time to focus on business development leadership and technical support for advanced manufacturing.

Public Health

  • Takes $1.9 million in grant funding away from the Office of Minority Health and places it into a program that supports community-based diabetes awareness, per the recommendations of a continuation review.
  • Provides a one-time $3.4 million appropriation to the State Public Health Laboratory to partially offset increased newborn screening costs and decreased Medicaid receipts
  • Provides a one-time $1.25 million appropriation the Children’s Developmental Services Agencies to partially offset the anticipated decrease in FY 2016-17 Medicaid receipts.
  • Provides a one-time $8.5 million appropriation to support the local health departments as they adjust to new Medicaid reimbursement rates.
  • Provides a one-time $250,000 appropriation funds for You Quit Two Quit, a smoking prevention and cessation program for pregnant and postpartum women, and mothers.
  • Establishes 2 receipt-supported (i.e. non-General Fund) positions to support efforts to reduce infant mortality.

Mental Health

  • Provides a one-time $30 million appropriation to a reserve fund to implement the recommendations of the Governor’s Task Force on Mental Health and Substance Use.
  • Provides a one-time $30 million appropriation to partially restore single stream funding that was cut last year for Local Management Entities/Managed Care Organizations, which manage mental health, substance use or intellectual/developmental disability services for people enrolled in Medicaid and those who do not qualify for Medicaid or have other insurance.

Other

  • Provides $7.7 million to support the establishment of a residency program at Cape Fear Valley Hospital that is affiliated with Campbell University Medical School.
  • Provides $550,000 to increase funding for Project CARE to support caregivers of people with Alzheimer’s disease.
  • Makes no changes to vocational rehabilitation programs.
  • Makes no changes to health service regulation programs.
  • Makes no changes to services for people who are blind and/or deaf and hard of hearing.
2017 Fiscal Year State Budget, NC Budget and Tax Center

House’s higher education budget proposal offers no relief for students

Budget subcommittees are meeting today to go over their respective proposals for the upcoming 2017 Fiscal year. House leadership is not expected to release their full budget, tax, and compensation package until next week.

Here are key highlights from the House’s proposed budget on higher education:

Community College System
Consists of 58 community colleges across the state serving all of North Carolina’s 100 counties.

The House budget proposal would reduce the Community College budget by 1.3 percent, or $13.9 million, compared to the current 2016 fiscal year budget. And it would do the following:

• Fail to reduce tuition rates to make college more affordable. Tuition has increased by over 80 percent since the 2009 fiscal year.

• Includes $26.2 million in savings to reflect a decline in enrollment but fails to fully reinvest those savings back into the system to help address longstanding unmet needs.

• Provide a $14.9 million increase to the system budget that can be used at the discretion of management. In budget terms, this increase lowers a “management flexibility cut” that is currently in place that would now total $44 million under this proposal.

• Provide a one-time $500,000 appropriation to support the development of competency-based education programs and a uniform system for granting credit for prior learning.

• Provide a one-time $25,000 appropriation to create a continuing education program for finance officers in local governments and public authorities.

UNC System
Consists of 16 four-year public universities across the state serving more than 220,000 students, as well as the NC School of Science and Mathematics.

The House budget proposal would increase the UNC System budget by 0.6 percent, or $16.8 million, compared to the current 2016 fiscal year budget. And it would do the following:

• Make no concerted effort to restore large and damaging funding cuts to the UNC System in recent years. Also fails to help make higher education more affordable, meaning students and families will likely continue to bear the burden of the rising cost of a college education.

• Provide $31 million to account for additional enrollment in the system.

• Provide a one-time $183,000 appropriation to fund internships and career-based opportunities for HBCU students. Total funding would be $500,500.

• Provide $3 million ($700,000 of which is one-time money) for technology and academic support strategies in order to recruit, retain, and graduate students who have not finished their baccalaureate degree.

• Eliminate funding for UNC’s School of Medicine’s Kenan Medical Scholars program, which supports students with a specialization in primary care, general surgery, and psychiatry who are interested in practicing medicine in a rural area.

• Provide $8.5 million for the Principal Preparation Program, which provides competitive grants for school leadership development.

• Provide $2 million to establish a new, merit-based scholarship loan program to recruit and prepare resident students to serve as teachers in hard-to-staff licensure areas and schools. There is no funding provided to restore the Teaching Fellows program.

2017 Fiscal Year State Budget, NC Budget and Tax Center

House releases pieces of FY2017: Overview of the Transportation Budget proposal

House budget leaders are beginning to release pieces of their budget proposal for the 2017 fiscal year that begins July 1st. Budget subcommittees are meeting today to go over their respective proposals, with the opportunity for subcommittee members to put forward amendments. House leadership is not expected to release their full budget and tax package until next week.

But we know that the House and Senate leadership already set a General Fund budget target at a little over $22 billion—which is less than the governor’s. They used a flawed formula to set this budget target without basis in economic realities or the needs of our communities.

Summary of the House Transportation Budget proposal

The state’s transportation system helps form vital social and economic structures by connecting people to services, businesses, and other opportunities across North Carolina—especially those who are transit-dependent and living in rural areas where there has been little job growth since the economic downturn.

The transportation budget is not supported by the General Fund. Rather it is supported by revenue from the Highway Fund and Highway Trust Fund, which are fed by the state’s gas tax, highway use tax, and Division of Motor Vehicle fees.

Here are key items in the House Transportation Budget:

• Repeals the “Light Rail Funding Cap” that lawmakers enacted last year. The cap limits state spending on light rail projects at $500,000, the Strategic Transportation Investments (STI) law that awards funding based on a data-driven process (which already favors roads over transit expansion). This cap affects planned projects in the state’s major cities.

• Provides an additional $32 million to the STI program.

• Keeps in place late fees for car owners who allow their DMV registration to expire—those fees range from $15 if registration has been expired for less than one month up to $25 if the period extends beyond two months. Under current law, those late fees would sunset in December 2017.

• Provides an additional $2 million for the state’s rural transit system and another $2 million for the state’s urban transit system.

• Provides $13.4 million to update and modernize the state’s ferry system. Now the ferry system would not compete under STI but would instead get a direct appropriation.

• Provides a one-time $1 million appropriation for an advertising and public outreach campaign to lift up DMV modernization initiatives.

• Provides $2.9 million to expand contracted staff that review driver licenses at the DMV.

• Provides $1.7 million in recurring funding and $151,900 in nonrecurring funding to hire additional employees who would be tasked with implementing reform initiatives at the DMV Medical Review Program. This program is responsible for gathering and evaluating medical information of drivers who have medical conditions that could affect safety on the state’s roads.

• Provides $17.9 million to support the general maintenance of roads and another $17.9 million to support the maintenance of secondary roads.

• Provides $9 million to support inmate litter collection and road cleanup efforts.

News

NCWU’s Report Card on the 2015 Legislative Session gives lawmakers mostly “very bad” grades

State lawmakers are failing to prioritize public policies that will advance and improve the lives of women and families across the state, according to a new 2015 Legislative Session report card that NC Women United unveiled yesterday at the North Carolina General Assembly. They called upon lawmakers to enact public policies during the Short Session that truly support women and families.

After each Long Session, NCWU and its members compile a report card detailing how the policy goals that are featured in their biennial Legislative Agenda fared. These policy goals aim to remedy the challenges that women face by expanding economic opportunity, access to health care, ending violence against women, and increasing civic participation and equality.

Twenty-two of their thirty-five policy goals received a “Very Bad” grade. The report card scores each policy goal along a spectrum of five grades: Very Good; Mostly Good but Mixed; Mixed; Mostly Bad but Mixed; and Very Bad.

“North Carolina women deserve policies that address the realities of the issues they face, rather than policies based on myths and stereotypes,” said Tara Romano, President of NCWU. “We are confident, however, that there are ways we can make progress in the coming Short Session. We hope lawmakers will listen to women’s voices and take action that will benefit women and families across our state.”

See the full report card and other details here.
NC SHAPE ----- OUTLINE in Illustrator

2017 Fiscal Year State Budget, NC Budget and Tax Center

Missed Opportunities: Investments that are MIA in Governor McCrory’s budget

Deep tax cuts are preventing Gov. McCrory from proposing a bold, visionary state budget for the upcoming 2017 fiscal year. The 2013 and 2015 tax cuts are draining more than $1 billion in revenues annually, squeezing out much-needed reinvestment in the programs and services that help children, families, and communities thrive. Under his budget, North Carolina will continue to be held back by substantial unmet needs.

There are few public dollars available for anything else after previous deep tax cuts and the governor’s prioritizing of an uneven compensation package for teachers and state employees. Without those tax cuts, what could have been possible for North Carolina?  There has been plenty of coverage of what is in his budget over the last week but there has been little coverage of what’s not in his budget. Below is a short list of investments that are missing in action but still greatly needed to build a stronger, more inclusive economy for us all.

 Economic Security

  • Fails to restore the state Earned Income Tax Credit, which allows low-income workers to keep more of what they earn. We are the only state to eliminate this anti-poverty tax credit in 30 years.
  • Fails to provide a raise for all teachers and state employees. Teachers and school personnel get a mix of raises and one-time bonuses. On average, teacher pay would increase by 5 percent (excluding the bonuses) but his plan would not provide every teacher a raise, including veteran teachers. State employees get a one-time 3 percent bonus. He also appropriates funds to implement a new market-aligned salary structure for state agencies, and to adjust salaries in state job classifications where employee pay is below market value, not competitive in the marketplace, and where the state is having difficulty recruiting and retaining employees.
  • Fails to provide a cost of living adjustment (COLA) for state retirees despite shrinking purchasing power due to changes in the economy.

Early Childhood Education, K-12 Schools, and Higher Education Read more