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Yesterday, the North Carolina house unveiled its $21.11 billion budget proposal for the 2015 fiscal year that begins in June 2014 and ends in July 2015. The proposal is moving through the committee process with the expectation of a final vote on the House floor by Friday. Surprisingly, there is a considerable difference in how the House leadership pays for its budget compared to the Senate’s and Governor’s paths. In particular, the House anticipates a smaller revenue shortfall for the current fiscal year and a far larger amount in agency reversions (which is money sent back to the state at the end of the year).

How the state raises the billions of dollars that fuel the state budget gets relatively little scrutiny compared to the rest of the budget during the budget process. Examining how lawmakers pay for the budget is more important than ever in light of last year’s tax plan that drains $438 million from the state’s coffers in the upcoming fiscal year. This is on top of the fact that lawmakers are facing a half-billion current year revenue shortfall and a projected revenue shortfall of $191 million for the next 2015 fiscal year—not to mention the fact that the shortfall could be as high as $600 million (see section at the end of this post). It is also on top of the Medicaid shortfall, which lacks agreement among the Governor, House, and Senate on its actual cost. Their estimates are far apart.

For the most part, the House pays for its budget proposal in the same way as the Governor and the Senate pay for their budgets. The similarities and differences are summarized below.  Read More

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Recent budget proposals out of the NCGA will eliminate Medicaid coverage for nearly 12,000 elderly blind or disabled people, cut $1 million from a popular program that delivers meals and provides in-home health services to the elderly, and shut down several regional offices of the state’s child-developmental services agencies that help babies and toddlers with disabilities.

One submission to N.C. Policy Watch’s “Your Soapbox” feature laments the difficulty in getting help even before the the proposed cuts.

I lost my insurance coverage under COBRA. I went for a year without insurance coverage. I didn’t qualify for Medicaid since I had over $2500.00 in the State Retirement system.

I had to fight tooth and nail to get help. Every way I went was a dead end. I was finally able to get help through Pender County for medical and meds.

It is a crying shame the way the poor and elderly are being treated; it’s like the legislature wants them to die.

Read the full submisson here.

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Do you have a story to tell? We want to hear more from people and their families who stand to be affected by the massive cuts proposed by our legislative leaders to Medicaid and other health and human services programs that serve the poor, disabled and elderly. What are your experiences? Tell us your story using this submission form.

To read personal stories from others affected by the cuts, click here.

Last night’s Moral Monday demonstrations took an unexpected turn when Senate leader Phil Berger (R-Rockingham) decided to sit down with teachers, who were staked out in front of his office late last night, to debate some of the education policies he has put forward.

WUNC Education Reporter Dave Dewitt has a great story about how the night went off script and the debate that took place:

But here’s where script took an unexpected turn. Just a few seconds later, Senator Berger came around the corner, pulled some couches into a circle, and offered to have a discussion.

And that’s exactly what they did. For more than an hour and a half, Berger and the protesters discussed education policy and the challenges facing teachers. There were some heated moments, and some passionate disagreements.

For the most part, all parties were respectful. The protestors whittled their list to three items they wanted addressed: they wanted tenure back; they wanted teacher assistants restored; and they wanted Berger to hold a series of public meetings on education. At the end, Berger committed to nothing more than another conversation the next day to consider further meetings.

And instead of being led out in handcuffs, the 15 protesters walked out the front of the building, nodding to Capitol Police officers, to meet their supporters.

Proffitt spoke first: “So we sat down and we had a good conversation, which to my understanding this is the first time this has happened in the last couple of years. So I think this represents a win for the movement because I think we put enough pressure on them that they realized they had to have a conversation.”

When he was done, Bryan Proffitt stepped behind the crowd and tried to gather himself. Someone handed him a bottle of water and the sweater he thought he had lost, and he finally took a deep breath.

He admitted the night had not gone like he thought it would.

“Talk is cheap,” he said.” There needs to be a real opening. But if there’s an opening, we’ll take it. But if it means the threat of arrest, if that means risking arrest again, and putting negative pressure on them again, then we’ll be back.”

Click here to read or listen to DeWitt’s full story.

 

 

Michael Cowin, Assistant Superintendent of Finance for Pitt County Schools, had some startling words for Pitt County School Board members last week, when he presented them with the Senate’s 2014 budget proposal for education.

“It appears that the Senate’s version of the budget proposes salary increases for teachers as a pawn in a political game that allows certain areas of education to be put on the chopping block.”

The Senate budget would cut 117 teacher assistants (TAs) from Pitt County schools, increase class sizes in second and third grades to eliminate 12 teaching positions, reduce the transportation budget by $300,000, and cut five school nurses from the district’s schools – an overall reduction of $5 million in state funding.

“It’s saying these areas aren’t needed,” said Cowin. “We need to promote to our legislative group the importance of teacher assistants in all areas, and not to be using such areas as leverage in a political game.”

Cowin also notes a key conflicting element contained in the Senate budget proposal – drastically cutting TAs while putting $300,000 into the Read to Achieve program, which relies on TAs to administer reading assessments that determine third graders’ reading proficiency.

Watch this cut of the video to see Cowin’s presentation and Board members’ reactions, who applauded Cowin for his courage to stand up and call out the Senate proposal as he saw it – a political game.

You can watch the entire Pitt County school board meeting from last week here.

This is the 6th post of a Budget and Tax Center blog series on public services and programs that face cuts in the budget process or have been underfunded in past years. See the other posts here.

If the Senate budget passes this year, rural communities are going to be living through a nightmare. Despite promises by the McCrory administration to support economic development in rural North Carolina, the budget passed by the state Senate last week continues long-term disinvestment in the very initiatives that rural communities need in order to create jobs and grow their local economies.

For most of the past 30 years, the state’s primary actor in promoting economic development in the state’s 85 rural counties was the N.C. Rural Economic Development Center. Incorporated as a state-charted nonprofit in the late 1980s, the Rural Center used a mix of state funding and private fundraising to support a range of rural development work—everything from small town revitalization efforts and building rehabilitation grants, to small business lending and workforce training programs.

Over the past three years, however, the legislature has significantly reduced state investment in these important activities, undermining the state’s ability to promote job creation and economic revitalization in rural communities, many of which are still grappling with long-term decline in manufacturing. Even in the darkest period of the Great Recession in FY 2009, the state strongly supported these efforts by funding the Rural Center at $24 million. Unfortunately, the new legislative majority in 2011 significantly reduced support for rural development, cutting the Rural Center’s budget down to $16 million.

Then, in last year’s budget, the General Assembly eliminated all state funding for the Rural Center, instead opting to move some of these operations into a newly-created Division of Rural Economic Development in the N.C. Department of Commerce. As part of this move, the legislature reduced state funding for rural development even further, from $16 million in FY 2012-13 for the old Rural Center down to just $13.8 million in FY 2013-14 for the new Rural Development Division, of which $2.5 million was dedicated to a newly created Limited Resource Communities grant program intended to support economic development specifically in designated low-resource communities (e.g., the poorest 40 counties in the state). And the damage to rural development extends beyond the dollar reductions—the new division simply doesn’t carry out many of the specialized initiatives once conducted by the Rural Center: the state no longer supports small business lending in rural areas, targeted rural workforce development, or small town revitalization efforts.

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