2017 Fiscal Year State Budget, NC Budget and Tax Center

Initial review of the House’s General Government budget

Budget subcommittees met yesterday 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.

General Government

This area of the state budget funds 17 state agencies and offices that are tasked with operating government efficiently and effectively. Some agencies focus on addressing inequities and improving quality of life so that all North Carolinians have a fair shot to get ahead.

Here are a few highlighted key items in the House’s proposed budget: Read more

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 K-12 education budget reflects impact of prioritizing tax cuts over reinvestment

North Carolina’s education needs are once again going unmet in the public schools budget proposed by House leaders for the upcoming fiscal year because tax cuts for the wealthy and profitable corporations have taken priority over reinvestment. Beyond funding that will likely be included in a final budget for teacher pay increases, the public schools budget includes a paltry 0.15 percent increase in spending over the original budget passed by state lawmakers last year. This modest spending for public schools fails to address ongoing unmet needs such as adequate funding for textbooks, classroom materials and instructional resources, professional development for teachers and school leaders, and schools nurses, among other areas.

State leaders continue to face a self-inflicted constrained revenue landscape that presents false choices regarding state budget decisions. Highlights from the House budget for K-12 public schools include:

  • Provides $46.7 million to account for enrollment growth of more than 5,800 students in public schools.
  • Replaces $57.3 million in General Fund dollars with lottery dollars for non-instructional support personnel. State lawmakers replaced $345 million in General Fund dollars with lottery dollars for this area for the current school year. The proposed change would result in this area of the public education budget being fully supported by lottery funding and continues the trend of a greater reliance on lottery dollars for public education.
  • Provides $5 million in one-time, non-recurring funding for instructional supplies. Under the House budget, state funding for instructional supplies would remain nearly 50 percent below peak 2009 spending when adjusted for inflation.
  • Provides $11.6 million in one-time, non-recurring funding for textbooks and digital materials. Under House budget state funding for this area of the budget would remain 34 percent below pre-recession spending when adjusted for inflation, which results in NC students being limited by out-of-date resources.
  • Provides $25 million for Literacy Coaches to support Read to Achieve initiative, which provides additional educational services to third-grade students who are not reading at grade level by the end of third grade. State lawmakers expanded the initiative to 1st and 2nd graders last year.
  • Cuts state funding for 1st and 2nd grade reading camps in half to $10 million from $20 million. Also changes nature of this funding from recurring to one-time, non-recurring funding.
  • Cuts $26.8 million in state funding for additional 1st grade teaching positions that were supposed to be filled beginning with the upcoming 2016-17 school year. The cut means that these would-be state-funded teacher positions are no longer available.
  • Provides $1.3 million to reinstate state funding for salary supplements to instructional coaches who have earned National Board certification.
  • Changes nature of state funding for Communities in Schools to one-time from recurring funding. Communities in Schools is a local-based dropout prevention initiative dedicated to keeping kids in school and helping them to succeed.
  • Provides $5.8 million to increase funding for Special Education Scholarship grants (vouchers), more than doubling the current budget. The program provides scholarship grants of up to $4,000 per semester for eligible K-12 students.
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

Justice and public safety budget proposed by House doesn’t address unmet needs

The revised Justice and Public Safety budget proposed by House leadership for the upcoming fiscal year entails a 0.29 percent, or $5.3 million, increase to the original JPS budget passed by state lawmakers last year. Despite many unmet needs in North Carolina such as re-entry services for ex-offenders returning into local communities, this bare-bones budget continues an austerity approach that favors tax cuts over reinvestment.

Additional spending items in the proposed revised budget largely consist on one-time funding for various initiatives, including:

  • Provides $350,000 in one-time dollars to update Alcohol Law Enforcement radios.
  • Provides $507,784 in one-time dollars for the construction and development of first generation School Risk Management Plans for public schools.
  • Provides a one-time $187,070 appropriation to expand the Center for Safe School’s pilot tip-reporting program for middle and high schools.
  • Provides a one-time $1.1 million appropriation and a recurring $301,276 appropriation to equip and operate the new Western Crime Lab in Edneyville, NC.
  • Provides a one-time $640,000 appropriation for equipment at the State Crime Lab.
  • Provides a one-time $2 million appropriation for outsourcing forensic analysis services, including toxicology and DNA, at the State Crime Lab.
  • Provides a one-time $250,000 appropriation to digitize mental health records in the judicial branch.

Two items that are not in this budget proposal:

  • Provides no funding for drug treatment courts, which provides a more cost-effective treatment option for drug offenders and cost a fraction of the cost to keep these individuals in prison. The Governor’s budget included funding for these courts.
  • Provides no additional funding to Indigent Defense Services for counsel assigned to those unable to pay for legal representation.