Greetings from Raleigh! Last week was the first full week of session here at the General Assembly, and we are preparing for the difficult session that awaits us.
I have listed some important topics below that I think are of great importance to you as well as to our state as a whole.
State Stabilization Funds in Federal Stimulus Plan Cut in U.S. Senate Compromise
Forty three states including North Carolina are facing budget deficits as a result of the national recession. North Carolina is facing a potential $3 billion shortfall. A projected $2 billion of that shortfall stems from loss in revenue over the next fiscal year due to rising unemployment and decline in state income tax revenue. These revenues annually fund increased enrollment growth in our K-12 school systems, community colleges and universities.
The stimulus package passed by the United States House included a state stabilization fund from which approximately $1 billion was allocated for North Carolina. This funding could be used to close North Carolina’s projected deficit, allowing North Carolina to avoid devastating cuts in education at the state and local levels. A broader discussion can be found here.
In an effort to move the budget bill out of the United States Senate where 60 votes are needed to prevent a Republican filibuster, the Senate Democratic leadership reached a compromise with a group of moderate Republicans that removes $40 billion from of the state stabilization fund. If this compromise becomes part of the budget bill passed by Congress it will result in a smaller amount available to assist North Carolina’s budgetary shortfall. That amount has yet to be disclosed. The impact of the compromise is outlined here.
The differences between the House and Senate versions of the state stabilization fund are obviously critical to North Carolina. Hopefully, the differences will be resolved and the stimulus package passed before the end of February.
Reappointment to Co-Chairmanship of the Senate Health and Human Services Subcommittee on Appropriations
On Wednesday of last week, Senator Basnight announced committee assignments for the 2009-2010 session. I have been reappointed to serve with Senator Purcell, a pediatrician from Scotland County, as co-chair of the HHS Subcommittee on Appropriations. On Thursday we met with the Senate Chairpersons on Full Appropriations to discuss initial budget targets. Senator A.B. Swindell, who is originally from Granville County and represented Franklin and Vance Counties in the Senate prior to redistricting, has been elevated from serving as co-chair of the Education Subcommittee on Appropriations to one of four Co-Chairpersons on Full Appropriations.
Our subcommittee is expected to make preliminary recommendations this week to the Full Chairs on potential budget cut targets between $400 million and $500 million out of the HHS budget. Over the next few weeks, programs considered for cuts will be featured in this newsletter and your feedback solicited. A good article on the subject can be found here.
Medicaid Optional Services: Potential Targets For Cuts
For every state dollar spent on Medicaid, the federal government matches that one state dollar with two federal dollars. In order to participate in the Medicaid program, North Carolina must provide mandated services to receive this match. Mandatory services include but are not limited to physician services, inpatient hospitalization and vaccinations for children. In addition to mandatory survives, there are 34 optional programs. North Carolina participates in 28 of these programs. You will find a list of the Medicaid services here, with Mandatory services listed on slide 18 and optional services listed on slide 20.
One of North Carolina’s optional programs is dental services. Our Medicaid program provides dental coverage for both children and adults. The federal government permits North Carolina to determine who can be eligible for these services. For example, the state of Illinois does not provide dental services for adults. North Carolina could eliminate all dental services covered by Medicaid or it could simply take the same position as Illinois and eliminate coverage for adults. Such a cut is estimated to save North Carolina $45 million. Frankly, I believe North Carolina should provide dental coverage and do not favor cutting it due to the budget shortfall.
Rural counties are already facing a crisis in access to dental services and the elimination of this optional program or the removal of adults from the program will only exacerbate the problem, as chronicled here.
As always, I welcome your comments, suggestions, and any input you can provide. By working together, we can find solutions to problems facing us every day. I do consider it an honor and a privilege to serve you in the North Carolina General Assembly.
Sincerely,
Doug Berger