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Falling Behind in NC, NC Budget and Tax Center

This is the second 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 first post here.

State funding that helps older adults who want to stay in their home would be slashed under the Senate budget that was passed last weekend. The Senate leadership wants to cut the Home and Community Care Block Grant (HCCBG) by nearly $1 million. This move would result in cuts to non-Medicaid in-home and community-based services—such as home-delivered meals, in-home aide, and transportation assistance.

State lawmakers established the HCCBG in 1992, and it is made up of both federal and state dollars.  The Senate’s $1 million cut would be on top of a $2 million cut enacted last year as part of federal across-the-board cuts known as the sequester. HCCBG services are available to people ages 60 and older but the “average” client is nearly 80 years old and the services are well-targeted to those who are near-poor and socially needy, according to DHHS.

The Senate passed a $1 million budget cut to HCCBG services despite a waiting list of roughly 16,000 people, according to a survey conducted by the NC Department of Health and Human Services. The demand for these vital services is likely to keep on the uptick as the so-called graying of North Carolina continues. Meanwhile, the growing cost of delivery shows no signs in subsiding. A $1 million budget cut will only serve to push additional older adults onto the waiting list. Read More

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Yes, you read that right — Wake County Public Schools would have to eliminate nearly 700 teacher assistants this fall if the Senate’s budget plan becomes law this summer.

The county would have to cut 693 TAs out of 1,250 positions allotted for the upcoming school year, according to WNCN. The Senate’s budget offers teachers who give up their tenure an average 11 percent pay hike beginning this fall. To pay for the plan, Senate leaders decided to gut the budget for teacher assistants — a line item that has already suffered deep cuts over the past several years.

“It is a great step in the right direction to address teacher salaries,” Wake County School Board Chair Christine Kushner said, “but we have teacher assistant positions that are being cut.”

The school system further said it would have to reduce bus services and the number of drivers used to transport students due to a proposed cut of $2.9 million in transportation funding.

There could also be a reduction in the number of drivers education classes offered for students, the school system said.

The raises built in to the Senate budget are for teachers paid with state money. Wake Schools said it would cost the school system $13 million to provide raises to any teachers paid with local funding.

Wake Schools cautioned that providing local raises could mean additional personnel cuts.

Cumberland County Schools has reported it would have to cut 220 out of its 330 teacher assistant positions — and that comes on top of cutting 100 positions they have already slashed for the upcoming year.

Some counties use TA funds to pay teachers’ salaries as well. In Stokes County, the Senate budget plan would mean cutting eight teaching positions in addition to 30 TAs.

Members of the House have reviewed the Senate and Governor’s budgets and plan to have their budget on the floor by the end of this week.

Falling Behind in NC, NC Budget and Tax Center

This is the first 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. 

There would be 70 fewer school nurses in North Carolina’s public education program under the Senate budget, even though the statewide average nurse-to-student ratio has been far below national standards for at least a decade. In addition to this 30 percent cut to the School Nurse Funding Initiative, the Senate budget would shift the remaining 166 nurses to the state’s most economically lagging counties, known as Tier 1 counties.

Apparently, the Division of Public Health “asked” for this cut in response to the Governor’s directive to cut spending by 2 percent, per the comments made today by the Fiscal Research Division staff. Senate budget writers factored agencies’ responses to the Governor into their budget proposal.  Again, this is just another decision by leadership that makes clear the harmful choices that must be made when policymakers reduce the availability of revenue—which is what occurred when lawmakers passed last year’s tax plan that drains available revenue for public investments.

There is a mountain of research that shows that health and education go hand in hand. That’s why the state instituted comprehensive school health services in public schools, per the state Division of Public Health: Read More

NC Budget and Tax Center

The North Carolina Senate passed their budget just past mid-night, in the wee hours of Saturday morning. The Senate budget puts into clear perspective the high price ordinary North Carolinians will have to pay for last year’s tax cuts that primarily benefit the wealthy and profitable corporations. Despite progress in some areas, the proposal leaves too many vital public services operating at diminished levels—failing to catch up with the needs of kids, working families, and communities five years into the official economic recovery. Our overview of the Senate budget can be read here.

State spending under the Senate budget would be 6 percent, or $1.4 billion, below the last budget that was enacted before the Great Recession, adjusting for inflation. Yet, there are more students to educate, citizens to serve and protect, and older adults to help care for.

Due to tax changes enacted last year, budget writers are now dealing with the consequences of a self-imposed budget challenge. State lawmakers created a structural deficit in which revenues are falling short of what is needed to meet critical needs across budget areas. The state is facing a revenue shortfall of $191 million in the 2015 fiscal year (not to be confused with the nearly half-a-billion shortfall for the current 2014 fiscal year that ends in June).

The driver of these revenue shortfalls—despite an economic recovery—is the series of tax cuts that lawmakers approved and Governor McCrory signed into law last year that will drain available revenues to the tune of $437.8 million in the 2015 fiscal year. As we reported earlier this month, estimates suggest that the revenue losses from the tax plan, particularly stemming from the personal income tax changes, could reach $600 million in next fiscal year.

It is important to put these revenue losses into the context of foregone public investments that are the building blocks of a strong economy, as the table below does. Read More

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Since assuming office Gov. McCrory has throttled the theme that Medicaid is broken and must be reformed. He began by offering a radical proposal of dismantling our current system and selling it off to private insurance plans. He has since backed away from that idea and now wants a more modest expansion of what currently works in Medicaid.

The House, in a bipartisan bill filed this session, clearly agrees with the Governor’s new approach. The legislation, spearheaded by Rep. Nelson Dollar, would build Accountable Care Organizations (or ACOs)  in Medicaid. These provider led ACOs would move us toward greater integration of care and away from fee-for-service medicine. Medicare is using the ACO model as are many private insurers. In fact, Medicaid is one of the only payers in the state not moving to this method of organizing care.

In its budget, the Senate flatly rejects this approach. That chamber wants Medicaid to move to full capitation. In other words, legislators want to provide a set budget to Medicaid. The insinuation is that the Senate prefers the Governor’s original plan to pay private insurers to care (or not care, as the case may be) for our most vulnerable citizens.

The Senate also engages in some fantasy by pulling Medicaid into a freestanding department that will engage the nation’s best health care minds in this ambitious reform effort. At least that’s how Sen. Louis Pate described the proposed process. The trouble, of course, is that the nation’s best health care minds consider North Carolina’s Medicaid program to be an important model and they aren’t interested in helping to dismember it. The nation’s best health care minds also aren’t interested in coming to our state and spending time tearing apart care for low-income people as the legislature reduces services, limits eligibility, and slashes the budget. We are, in short, engaged in the opposite of innovation.

Rep. Dollar is a smart chap and likely realizes that his ACO bill isn’t going anywhere as a piece of legislation. That means he will need to stick the proposal into the House budget to give it a fighting chance. Hence, the showdown mentioned in the title of this post.

Certainly the House is moving in a better direction. But it’s a good time to reflect that Virginia is having its own budget battle over Medicaid right now. Except instead of fighting over how to fiddle with (or blow up) a program that is working, Virginia’s leaders are having a serious discussion about using federal funds to expand Medicaid coverage to 400,000 people. If that happens it means that our tax dollars will help boost Virginia’s economy, bolster its rural hospitals, and support its citizens.

That will certainly be charitable of us, but not wise.