I hope that everyone is enjoying the wonderful weather we are having.
It seems as though summer is right around the corner. This week I will be discussing three things: Governor Purdue’s actions to bridge the gap in the state’s budget, two ways that the General Assembly is seeking to cut wasteful government spending, and two pieces of upcoming legislation.
BUDGET FACES AN ADDITIONAL 1 BILLON DOLLAR SHORTFALL
Decreased revenue collections, following the April 15th deadline for tax filing, left the State budget with an additional 1 billion dollar shortfall for the current fiscal year ending June 30, 2009. Governor Perdue immediately responded by imposing an across the board one-half percent pay cut for all state employees and teachers for this fiscal year. The one-half percent will be taken from state employees’ paychecks in May and June.
The revenue shortfall this fiscal year is anticipated to extend into the next fiscal year; July, 2009 through June, 2010. Budget writers in the State House will have to devise a plan to cut an additional 1 billion dollars from the budget that the State Senate passed and/or raise taxes.
The State Senate and State House will consider various alternatives to meet the shortfall next year. One alternative is to furlough all public employees next year, including school teachers, for one day each month for a savings of over 500 million dollars. The Senate is seriously examining a total restructuring of our tax system that could make revenues more stable and fairer by lowering the sales tax on goods and expanding the sales tax to services that are not currently taxed. A stable and fair tax structure, which includes taxing some services, could enable the State to avoid furloughs of State employees. State Treasurer Janet Cowell has warned that adopting furloughs could jeopardize our State’s current Triple A bond rating, which could cause a cost increase for the funding of major projects across the State. See this article from the Raleigh News & Observer for more detail.
All of the viable options to balance the State’s budget involve choices that have undesired consequences. Next week’s newsletter and future editions will discuss the budget options. Next week’s newsletter will feature the Senate plan to modernize the State’s tax structure and I hope to seek your feedback once that plan is finalized.
AUDITORS REAFFIRM AUDIT OF PERSONAL CARE SERVICES IN THE STATE’S MEDICAID PROGRAM
The State budget passed by the Senate, that is now before the State House, provided for a 54 million dollar reduction in state dollars and an estimated reduction of $162 million additional federal dollars in the Personal Care Services Program for Medicaid recipients. The Personal Care Services Program provides assistance to individuals with activities of daily living such as cooking, bathing, and housekeeping. Taxpayers save money by providing these services when they are allocated for those truly in need and without a sufficient family structure to assist them. These services allow the elderly and disabled to stay in their homes rather than being admitted to more expensive adult care homes and nursing homes. The concept behind the program is both financially sound and provides a dignity of life for those with the greatest need. While the concept of the program is valid, the administration of the program in North Carolina is seriously flawed.
The Senate cut this program pursuant to a series of audits revealing that as many as 45 percent of the persons receiving services do not meet the eligibility requirements. Supporters of the program contend that the auditors made their determination by only reviewing paperwork and not directly interfacing with any of the program’s recipients. In response to this criticism, Senator Purcell and I recently met with auditors employed by the Division of Medical Assistance. The auditors utilized registered nurses who met with participants in their homes to determine whether recipients were physically unable to perform the activities allegedly qualifying them for services.
Fully funding any program in which some 45 percent of participants are not qualified to receive benefits cannot be justified.
REDUCING WASTE IN CHILDCARE SUBSIDY PROGRAMS
North Carolina currently pays for day care services for children of parents who are reentering the job market, but whose initial employment does not provide sufficient income to pay for child daycare. The concept behind the program is that once fully integrated into the job market, parents will be able to assume the cost of child care.
Currently there are 94,701 children receiving assistance through the childcare subsidies in North Carolina, with families of some 25,000 children, who qualify for childcare subsidies, on the waiting list. These families cannot receive assistance due to limited financial resources.
After the short session of the General Assembly last year, I co-chaired a Commission that examined measures to create greater efficiencies in administering the program with the objective of being able to serve more citizens who qualify for the program. Two Directors of Social Services who served on the Commission reviewed childcare caseloads in their respective jurisdictions and determined that at least 20 percent of recipients were not eligible to continue to receive childcare services.
The budget recently passed by the State Senate increases the amount of money that county Social Services Departments can use for administrative costs. Currently the departments can use 4 percent of allocated funds for administrative costs, and this amount would increase to 5 percent under the Senate’s budget. The increase is to be directly used to better administer eligibility of recipients in the program. The increase will allow counties to perform quarterly reviews of eligibility as opposed to the annual reviews currently being conducted. Quarterly reviews would allow counties to more efficiently, and correctly, allocate funds while expediting the process for those families on the waiting list. In other words, counties will better serve the needs of more people while making sure the money is going to those that are most in need of it.
Given the fact that the State cannot fund daycare for all families who are eligible, it is incumbent upon local Department of Social Services to ensure that only qualified families receive benefit of the program. According to Nikki Griffin, the Director of the Franklin County Department of Social Services, it is “more important than ever” to address these problems. In Senate District 7 we are currently funding the child care for 1,825 children, with approximately 200 children on the waiting list. Ms. Griffin continued, “due to the current state of the economy, people are not as stable in their jobs as they once were. Now they are seeking new employment or changing their current work hours. This means that their need for child care assistance is rising. We need to make sure that we are serving those that are truly in need.”
VOTE ON SMOKING BAN WILL BE CLOSE
Last Wednesday, the Senate Healthcare Committee approved legislation banning smoking in public places, including establishments with bars. Thursday, the full Senate was poised to debate and vote on the legislation, but proponents determined they did not have enough votes for passage. Current “nose counting” suggests 25 Senators are opposed to the ban and 24 Senators favor the ban. The Democrats are currently divided with 20 Democrats in favor of the ban and 9 Democrats opposed to the ban. Republicans also appear to be divided with 16 members poised to vote against the ban and 4 poised to vote for the ban. Currently, one Senate seat is vacated due to Senator Malone’s death and a replacement will be determined this Wednesday night.
When the vote takes place, an amendment will likely be offered that is comparable to an amendment adopted in the House that exempts the smoking ban in restaurants and bars who do not serve or employ children. This amendment will likely be adopted in the Senate by a margin between two and five votes. If there is a tie when the final vote takes place, Lieutenant Governor Walter Dalton will be responsible for breaking the tie.
I received more personally written e-mails by constituents in response to my last newsletter discussing the smoking ban than any newsletter I have issued in over four years. The e-mails split almost 50/50 among my constituents. I have reviewed and considered all opinions and remain opposed to the ban.
I want to thank each of you for taking the time to share your detailed responses.
VOTE ON HEALTHY YOUTH ACT TO TAKE PLACE THIS WEEK
During the mid 1990s, the General Assembly mandated that public schools provide abstinence until marriage sex education. In one of the darkest days in the history of North Carolina, The Franklin County Board of Education voted to remove pages from an approved health textbook discussing contraceptives as additional means to avoid pregnancies and sexually transmitted diseases. See this story for a full discussion of the events.
Two weeks ago, the House passed the Healthy Youth Act by a vote of 62-52. Here is a bill to the latest edition of the bill. This legislation gives parents the option to choose abstinence until marriage sex education or abstinence based comprehensive sex education. A form will be sent to parents detailing these two options and must be returned to the school with the parents’ decision. If no form is returned, the student will not receive sex education. The bill directs local school boards to create and implement a program in which parents whose children do not return a form are notified and through which the ramifications of not returning a form are explained. This is meant to ensure that students who do not agree with their parents’ decisions are not able to circumvent the process by disposing of the form.
Vance county serves as an example of the need for this parental option for comprehensive sex education. Vance County has consistently had one of the highest teen pregnancy and HIV rates in the State. See these two news stories, here and here.
CABIN BRANCH FARMER’S MARKET OPENS IN DOWNTOWN FRANKLINTON
This weekend I had the opportunity to participate in the grand opening of a new business in my district. A Warren County farm family, Yarbrough and Shauna Williams, opened up a new farmer’s market named Cabin Branch Farm Market in downtown Franklinton. Meat and vegetable products produced locally will be sold at this market. Fifteen area farmers have signed up to sell products at this in-door farmer’s market.
The State Agricultural Department is closely working with Mr. and Mrs. Williams in developing strategies to market local products. The project will not only create jobs in the community but expand sustainable farming as well.
COMMITTEE SCHEDULE
Please take a look at the bills that are scheduled to be heard in committee this week. If there is a bill that you feel passionately about, please let me know. I would be happy to discuss it with you.
Tuesday, May 5th
Judiciary II
SB 44 Appeals of Quasi-Judicial Land-Use Decisions
SB 643 Amend Drug Exam Regulation
SB 969 Amend Purpose/Child Placing/Child Care Laws
SB 1007 Amend Home Inspector Licensure Laws
SB 1062 Strengthen Dom. Vio. Protective Orders/Pets
Commerce
SB 567 Promote Electricity Demand Reduction.
SB 660 Auto Insurance/Diminution in Value
SB 686 Electronic Reporting of Abandoned Property
SB 889 Utilities/Carrier of Last Resort
SB 981 Mortgage Guaranty Insurance Revisions
Wednesday, May 6th
Education/Higher Education
SB 386 Make Best Use of Corporate Tax Revenue
SB 722 No High School Graduation Proj. Required
SB 738 Diabetes Control Plans in Charter Schools
SB 860 Student Trust Fund/Proprietary Schools
SB 406 Classroom Experience for School Personnel
SB 1019 Establish NC Financial Literacy Council
SB 1030 After-School Child Care Programs
Health Care
SB 1022 Comparative Effectiveness Task Force
SB 765 Clarify Patient Data/Medical Care Data Act
SB 694 Amend Dentistry Laws/Out of State Dentists
SB 917 Cancer Patient Assistance
SB 331 MH/National Accred. Benchmarks
As always I welcome your comments on this newsletter or anything else that concerns you. My office is here to help in whatever manner we can. It is an honor to serve as your Senator and I will do everything in my power to live up to that honor.
Sincerely,
Doug Berger