Action for Children North Carolina | www.ncchild.org
 
July 22, 2013  
 
Senate Budget Released  
 
Greetings!   

House and Senate leaders unveiled their compromise budget draft last night. The $20.6 billion spending plan represents a 2.5 percent increase over the current budget and includes the recently-passed tax plan reducing personal and corporate income tax rates. 

Visit Action for Children's Policy and Budget Action webpage for a line-by-line comparison of the final budget proposal vs. the Governor-, Senate-, and House-proposed budgets, or click below:

 Here are some highlights:

  

HEALTH & HUMAN SERVICES 

 

Medicaid 

 

The final budget includes steeper cuts to Medicaid than either the House- or Senate-proposed budgets. The additional cuts are mostly to providers, including rate freezes for some services, limitations on usage of some services, a change in the way prescription drugs are invoiced, a "shared savings" plan, and paying hospitals a lower percentage of their outpatient costs. Children under 133 percent of the federal poverty level are shifted from Health Choice to Medicaid, per the Affordable Care Act.   

 

Child Development

 

The final budget adds 2,500 pre-K slots, funded by $12.5 million in lottery money. This is only half the slots the House had proposed but much better than the Senate plan to shift funds from pre-K to child care subsidies, effectively cutting 2,500 pre-K slots. In addition, funds are shifted to Medicaid to help cover the expected shortfall, and some state funds are replaced with federal funds. There is no reduction to County Services Supports, as proposed in the Governor and House budgets.

  

Public Health

 

The House and Senate agreed on cuts to Early Intervention, closing 4 of the 16 regional agencies that provide EI services, and cuts to AIDS drugs. Tobacco prevention is given only $1.2 million, for the NC Tobacco Quitline, which is a compromise number between the House and Senate versions. The Oral Health section will lose 15 positions, which is less than proposed in the Senate budget (48 positions), but no additional funding is committed to hiring hygienists and technicians at local health department-sponsored dental clinics. The ECU High Risk Maternity Clinic, which serves high-risk mothers in the eastern part of the state, the Nurse-Family Partnership and maternity homes receive state funding in the final budget, rather than federal funding. Other important prenatal health programs receive federal block grant funding, including the Safe Sleep campaign, the March of Dimes, the Perinatal Quality Collaborative, the 17P progesterone project to decrease pre-term births, and the Carolina Pregnancy Care Fellowship.

   

Social Services

 

The House and Senate agreed on cuts to contracts and additional state funds to replace lost federal dollars. The final budget proposes increasing funding to NC Reach, which helps foster children attend college, by 10 percent, a compromise position. The budget also includes a transfer of funds to Medicaid to help cover the shortfall. Food banks and Children's Advocacy Centers do not receive additional funds, but the House-proposed Adoption Incentive Fund and Permanency Innovation Initiative Fund are included.

 

Health Choice

 

The largest decrease in Health Choice funding is the transfer of some children to Medicaid. The plan also includes some additional cuts to Health Choice that mirror changes made in Medicaid:  provider rate freezes for some services, cuts to contracts, a shared savings plan, paying hospitals a smaller percentage of their outpatient costs, and a change in the way prescription drugs are invoiced. There is no cap placed on Health Choice enrollment.

 

Mental Health

 

Two major proposals in the Senate budget -- closing the three state-run Alcohol and Drug Abuse Treatment Centers and committing less than half of those funds to community-based treatment programs, and the closure of Wright School, for children with mental health and behavioral disorders -- are toned down in the final budget. The ADATCs receive a 12 percent cut, to be distributed across the system, and Wright School is not cut. Broughton Hospital receives funding for 19 more beds, from the Medicaid contingency fund, and the new Broughton Hospital receives $11.5 million for medical equipment, furniture and IT. Funds are included for the N.C. Child Treatment Program, for children dealing with trauma, and for a statewide telepsychiatry phone line to help reduce stress on emergency room departments.

 

K-12 EDUCATION

 

Overall cuts to K-12 education fall between the House- and Senate-proposed numbers for 2013-14, and cuts to the the 2014-15 K-12 education budget are a bit lower than either previously proposed budget.

 

The final budget adopts the Senate proposal to eliminate the annual LEA adjustment (where local school districts returned a certain amount of funding back to the state), and divides the cut instead among classroom teacher allotments, instructional support personnel and instructional supplies. The result will be increased student:teacher ratios and less funding for instructional support personnel and supplies. Teaching assistants receive a large 20 percent cut. 

 

$18.6 million is allotted for the Excellent Public Schools Act, which would eliminate teacher tenure in favor of contracts based on performance, conduct teacher evaluations and create a system of school performance grades. The final budget also includes a $500 annual salary increase for teachers who agree to sign a four-year contract based on teacher effectiveness, as proposed in the Senate budget. There are cuts to low wealth county supplemental funding, the Exceptional Children headcount, small county supplemental funding and the Limited English Proficiency program, as well as DPI administration. The school bus replacement fund is cut by $30 million.

 

State support for the N.C. Center for the Advancement of Teaching is shifted to one-time funding, pending a review of the program's effectiveness, and state support for the Teaching Fellows scholarship program is eliminated. Teach for America receives additional funding (along with specific prescriptions about how to spend it), and the charter school office staff is increased slightly (3 new positions), due to the removal of the charter school cap. A pilot program to increase the dropout age from 16 to 18 is created in two school districts, within existing funds. Responsibility and funding for teachers at juvenile facilities is not transferred from Public Safety to DPI, as proposed by the Senate.

 

Several House-proposed additions are included in the final budget:

  • Vouchers for private school in the second year of the biennium;
  • Incentives for LEAs to develop Advanced Placement and International Baccalaureate courses;
  • A Educator Effectiveness Task Force;
  • Funding to put law enforcement officers and panic alarm systems in elementary and middle schools (a proposal to also include funding for more school counselors and psychologists did not make it into the final budget);
  • Funding to pay students' testing fees in high-value fields;
  • A pilot grant program to foster innovation in education;
  • Funding for the Yadkin Valley Regional Career Academy.

 

PUBLIC SAFETY, as it pertains to juvenile justice

 

The final budget's cuts to juvenile justice are very similar to the House- and Senate-proposed budgets.

 

The budget proposes to close several youth institutions, including Western Youth Institution, Lenoir Youth Development Center, and Richmond and Buncombe Detention Centers, Administrative cuts are proposed, including three high-level, filled executive positions, and the Youth Development Center budget receives a cut. Responsibility and funding for educational services are not transferred to DPI, as proposed by the Senate. Additional funding is allotted for a new Western Multipurpose Group Home, to respond to needs arising from the closure of the Buncombe Detention Center, though the funding allocated is less than that proposed by the Senate. In addition, $1 million is provided to Juvenile Crime Prevention Councils to increase community programming for adjudicated youth (less than the Senate proposed), and $316,000 is allocated for a new Center for Safer Schools, as originally proposed by the Governor and taken up by the House.