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This morning’s edition of Setting the record straight over on the main Policy Watch website has some rare praise for the surprisingly progressive rhetoric emanating from state budget negotiations this week. But it also takes lawmakers to task for their failure to seize upon the most obvious solution to their inability to find a way to fund the essential services (i.e. teachers and health care) that they have prioritized. The best answer to the General Assembly’s budget dilemma, of course, is to halt next January’s scheduled tax cut that will primarily benefit the rich:

“According to the best and most recent estimates, the 2013 tax cuts – which overwhelmingly favor the state’s most wealthy taxpayers – are costing the state more than $500 million in foregone revenue in the fiscal year that began last week. Add to this the fact that the cuts have caused a downward revision of revenue projections by another $190 million and the gap may well balloon to more than $700 million.

Even if lawmakers left these cuts in place, however, and merely stopped the implementation of a yet another round of tax cuts scheduled to take effect next January, the state would still realize $300 million in additional revenue in calendar year 2015 – more than enough to make a significant dent in the education shortfall and solve innumerable problems in the current negotiations.”

Meanwhile, this morning’s lead editorial in the Charlotte Observer has another quick fix proposal — at least on teacher pay: Read More

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Senator Bob Rucho of Mecklenburg County

Senator Bob Rucho of Mecklenburg County

As Clayton Henkel and Lindsay Wagner report in the posts below, negotiations over teacher pay have taken what appears to be a positive turn this week at the General Assembly with the announcement that the state Senate is willing to back down on its demand that teachers choose between a pay raise and their right to a measure of due process when it comes losing their jobs.

It’s welcome news, but news that is tempered by the fact that Senators apparently kept their fingers crossed behind their backs while they made the offer. Senate Education Committee chairman Jerry Tillman also told reporters Lynn Bonner and Jim Morrill that the matter of teacher due process (i.e. “tenure”) would be back:

“’We’ll get rid of tenure in 2018,’ he said. ‘That issue will be settled.’”

Perhaps even more frustrating than Tillman’s statement in the aftermath of yesterday’s negotiations, however, were the comments of his Senate colleague and fellow conservative fire-breather, Bob Rucho.

When asked about the Senate’s consistent refusal to budge on its plan to pay for teacher raises by firing thousands of teacher assistants (a plan that even Senate President Pro Tem Phil Berger hinted might finally be on the way out) Rucho was his usual  aggressive self. As Morrill and Bonner reported: Read More

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The N.C. Department of Health and Human Services released a cheerful video this afternoon touting the supposed successes of the state’s new Medicaid billing system that delayed payments for thousands of medical providers for months over the last year.

The nearly 4-minute video produced by state employees includes interviews set to upbeat instrumental music with several providers and DHHS officials talking about how well the complicated Medicaid billing system is working one year after its bungled July 1, 2013 launch.

Much of the system is working now, and providers are getting paid faster than before, DHHS officials say in the video.

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 N.C Tracks replaced the state’s previous 25-year-old Medicaid system and came online despite warnings in a May 2013 performance audit from the state auditor’s office that DHHS hadn’t fully tested the system, left too much up to vendors’ discretion and had no way of knowing ahead of time if the system was ready.

The billing problems have left legislative fiscal research staff without firm budget numbers on the $13 billion program, a major point of contention in the current budget negotiations for Republican state Senate leaders.

Missing from DHHS’ birthday video were some of the choicer statements doctors, lawmakers and others have had about new system and its rollout last year under N.C. DHHS Secretary Aldona Wos.

Here’s a few of the less-than-glowing comments:

  • “NCTracks has made billing go from complex to borderline impossible,” said Sandra Williams, chief financial officer of Cape Fear Valley Health System, at an October legislative hearing.
  • “NCTracks was a disaster, and the State was beyond the point of no return,” lawyers wrote in a lawsuit filed by medical providers in January against the state agency.
  • “We are pretty much in the dark with trying to figure out where we are in the current year,” said Susan Jacobs, a fiscal analyst for the legislature in January about getting budget data from N.C. Tracks.
  • “It’s June 19 and we still don’t have the numbers,” Sen. Tom Apodoca, a Hendersonville Republican, said in a hearing earlier this month about Medicaid budget information, according to the News & Observer. “If push comes to shove, we can always issue subpoenas.”
  • “We are having to manually key claims and do things that before would pay automatically,” Laura Williard of High Point’s Advanced Home Care told WNCN in early June. “At one point, I had 11 temps working for our company to do something that was paid automatically before.”
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As illustrated by Thomas Mills with Politics NC, the state budget will inevitably reflect the ideological interests and goals of the men in charge of our state legislature rather than the actual needs of real people. He writes of their personal motives:

The GOP is only unified about two things. First, they want to make sure that the rich and big corporations don’t have to help close the budget hole that the legislature gave us. That’s a burden for the rest of us to shoulder. Second, they want to give teachers pay raises. And that’s to protect their seats by appearing to support public education. Not many people are buying it but that’s their story and they’re sticking to it. 

Having connections with big money and corporate interests, our legislative leaders are not working to serve the people but to serve big business and the “free market.” Mills further states:

The competing budgets are a reflection of the men who run the legislature. The senate budget is an ideological document hell bent on protecting the free market principals and social Darwinism that Phil Berger has so vigorously embraced. He’s a Calvin Coolidge Republican who believes in Coolidge’s famous quote, “The business of America is business.” What Coolidge Republicans like to forget is that his policies led to the Wall Street crash of 1929 that, in turn, led to the Great Depression.

Will the new budget help us or harm us? Our leaders are not interested: their main concern is upholding the economic privilege of North Carolina’s wealthiest, even if that means compromising the needs of the majority of its citizens.

NC Budget and Tax Center

Gov. McCrory’s proposed budget for fiscal year 2015 and respective budgets by the House and Senate include significant cost savings from closing and downsizing various correctional facilities. Savings from these changes total around $14.2 million in both the House and Senate budgets and $14.9 million in the Governor’s budget.

Savings generated from these changes could have been used to promote safer communities across the state.  However, lawmakers went down a different path. For instance, Gov. McCrory advocated for state funding for drug treatment courts to be included in the state’s current fiscal year budget. These courts cost a fraction of the nearly $28,000 it cost to keep individuals in prison. However, the final budget passed last year by state policymakers did not include funding for drug treatment courts.

All three budget proposals for fiscal year 2015 – which begin July 1, 2014 – fail to include funding for drug treatment courts. The House and Senate budgets, however, go further and cut funding for programs that promote fair and equitable access to the justice system and safe communities across the state.

Funding cuts to Justice and Public Safety in the House and Senate budgets include:

  • Elimination of the Access to Civil Justice Fund, which supports the representation of poor North Carolinians in civil cases.
  • Reduction of administration funding for Indigent Defense Services, which in part oversees the provision of legal representation to indigent defendants and others entitled to counsel under North Carolina law.
  • Reduction of administration funding for Administration of the Courts

Due to tax changes enacted last year, state policymakers are constrained in major ways. This is effectively a self-imposed budget challenge. Nevertheless, as demonstrated with choices made within the Justice and Public Safety area of the budget, where there’s a will, there’s a way.

Budget writers found revenue by making significant changes to the operations of various correctional facilities as well as by cutting state funding for programs that work to enhance the efficacy of the state’s justice system. These state funding cuts would limit service providers’ ability to assist individuals and families in need to legal representation.

What is clear from all three budgets is that state lawmakers are continuing down a dangerous path of more state funding cuts rather than reinvestment as the state recovers from the Great Recession. One can only hope that as budget writers work to negotiate a final budget for the upcoming 2015 fiscal year, state funding is restored for these programs that were put on the chopping block in the House and Senate budgets.