The Senate budget puts almost no funding back into public education, letting stand the harsh cuts that were enacted last year. A five percent increase to Health and Human Services is mainly due to increases in Aging and Adult Services and Medicaid. The central administrative budget of HHS is cut by more than 60 percent, and no restorations are made to early education.

The proposed Senate budget increases total funding for state government by about one percent over the budget approved last year. The Governor's proposed budget increased funding by 4.9 percent, while the House proposed budget increased funding by 1.6 percent. Like the House budget, the Senate budget does not include the temporary sales tax increase that allowed the Governor to invest more heavily in public education.

Below are some highlights from the Health and Human Services, Public Education and Juvenile Justice sections of the proposed Senate budget. A detailed line-by-line comparison of the Health and Human Services and Education sections of the Governor's budget, the House budget and the Senate budget are also available on the Action for Children website (www.ncchild.org).

Health and Human Services

The Senate budget increases Health and Human Services funding by 5.3 percent over the budget approved last year, but most of that funding is in Aging and Adult Services, whose budget is nearly doubled, and in Medicaid, for repayments to the federal government and other payments. Cuts made last year in early education, in tobacco cessation and prevention, and in infant mortality prevention are allowed to stand in this budget.

For comparison, the Governor's budget increased funding for HHS by about 4 percent, and the House increased it by 3.7 percent. Some highlights by division include:

Division of Central Management and Support

• "Flexibility" cut: Cuts $34.3 million from the HHS administrative budget (more than 60 percent of the budget) due to "unachieved reductions." In other words, the legislature required such unreasonable cuts from HHS in the past that the agency was not able to meet them, and those cuts are being imposed again as an overall blanket cut. There is no discussion of where these millions in new cuts are to be taken.
• The Senate budget also includes the same special provision included in the House budget that would eliminate $5 million in funding for nonprofits.

Division of Child Development and Early Education

• Smart Start: $10 million shift from state funds to federal funds (House shifted $4 million). While the House and the Governor increased funding for Smart Start ($3.5 million and $18.2 million, respectively), the Senate does not.
• NC Pre-K: The Senate made no investment or reduction of the cuts made last year. The House increased funding by $15 million, which would fund 1,765 students and begin to make up the cut from last year. The Governor's budget increased NC Pre-K funding by $25 million.

Division of Public Health

• Tobacco Prevention, Cessation: NO investment or reduction of last year's cuts. The House invested $5.5 million. Governor's budget invested $10 million.
• High Risk Pregnancy Clinic at ECU: No funding. The House and Governor funded this item, an Action for Children priority.
• The Senate budget includes the same special provision included in the House budget that would eliminate contracts with Planned Parenthood.

Division of Medical Assistance

• Funding for federal payments: The Senate includes $55 million to repay the federal government for an overdraw and changes in a drug rebate program.
• Managed Care Organization schedule delays: The Senate includes $11 million to pay for delays in the statewide expansion of managed care organizations.
• Medicaid Fraud, Waste and Abuse elimination: The House and the Governor each included about $3.8 million for this item; the Senate includes $15 million for cost settlements with various providers and for these prevention/elimination initiatives. No specifics are given.
• Savings from implementing/expanding Community Cares for North Carolina (CCNC), a managed care program: House included this item ($59 million) but the Senate did not.

NC Health Choice  

• No reductions. Open enrollment should continue.

Division of Mental Health

• Cherry hospital: $3.5 million for 124 new beds.

Division of Aging and Adult Services

• Transition to community living and short-term assistance: The Senate budget includes $35.3 million to transition adults with severe mental illness from hospitals to community living arrangements ($10.3 million) and to establish a fund to provide temporary assistance to adult care and group homes as they transition to the new community living plan ($25 million).

Public Education

The House proposed budget increases funding for public education by only half a percentage point over the budget approved last year. The Governor's budget increased public education funding by 7.6 percent, and the House budget increased it by 3.3 percent. Highlights include:

• LEA adjustment:  Compared to the House budget's restoration of 66 percent of the funds that would have been taken away from local school systems based on the budget approved last year ($333 million), the Senate budget restores only $74 million. The Governor's budget restored $503 million of those funds.
• "Excellent Public Schools Act": The Senate budget provides $47 million for the first year's implementation of this Act, which aims to improve reading skills, using a test-based system and requiring retention of any students who do not pass the assessment. Budget bills typically do not include major policy changes such as this Act.
• Residential Schools: The Senate budget restores $4.5 million for residential schools. The House restored $5.2 million.
• Teacher raises, reduce class size, assessments: The Governor's budget included $132 million for these items. Like the House budget, the Senate budget does not include them.
• Teacher mentoring and the NC Center for the Advancement of Teaching: Governor's budget included $12 million for these two items. Like the House budget, the Senate budget does not include them.

Juvenile Justice

The Senate budget requires a close to two percent cut from the Public Safety Department, which houses the Division of Juvenile Justice. No cuts are specifically marked to come out of juvenile justice; however, the Senate does NOT include the language the House did that no reductions are to be taken from community programs in the Division of Juvenile Justice, including multi-purpose group homes, residential treatment providers and Juvenile Crime Prevention Councils. We can assume that the Division of Juvenile Justice will bear some of the cut to the Department of Public 

Safety.

The Senate budget includes a special provision transferring $121,600 from the Juvenile Crime Prevention Councils to Project Challenge.

The Senate budget does not include the closure of the Edgecombe Youth Development Center, like the House budget did.

Action for Children will release analysis of the final budget, when it becomes available. 

Sincerely,