Governors Budget

The Governor released her proposed budget today.  It is available online here.  Her staff presented an overview to the House and Senate this afternoon and joint House and Senate appropriation meetings will continue next week.  The Governor's budget includes a continued sales tax increase of 5.5%, something Republican members quickly took issue with.  During the budget overview, her staff did make sure to say that Medicaid is doing great, with 2.2% decrease from last year at this time. Because Medicaid is coming in under-budget, the budget will not need to increase for enrollment growth in the first year, a very positive sign for maintaining services.  Below are highlights:

Health and Human Services

• Current year $17.9 bil total budget, $12.9 in receipts and federal funds, $4.9 in state approps; 2011-12 $18.3 bil, 2.2% growth, but state approps reduced by 4%; 2012-13 $19.1 bil second year.
• Medicaid spending accounts for 67.3% of total general fund appropriations to DHHS; 15.1% is Mental Health, then Child Development, followed by DSS at 4% = Health agencies are over 87% of DHHS spending
• Medicaid overall state appropriations down 3.4%
• Division of Central Management and Support Reductions: retirement incentives; department wide administrative efficiencies reducing budget by $1 mil and eliminating 25 positions; reduces special appropriations and nonprofit funding by $2.3 mil; $9.6 mil INCREASE for NC FAST development and implementation
• Division of Aging and Adult Services: Use civil monetary penalty proceeds assessed against nursing homes to replace state funds for the Long-Term Care Ombudsman program ($200,000); $500,000 in funding to continue Project CARE, which provides respite for caregivers of people with dementia
• Division of Social Services: Eliminate vendor payments for new special needs adoptions ($550,963 reduction); eliminate pilot funding to local DSS offices for Child and Family Team support ($420,804); prioritize Adult Day Care services received through the State Adult Day Care Fund for adults who are 18 to 59 (adults 60 and over may receive through the Home and Community Care Block Grant) ($1.1 mil reduction)
• Division of Medical Assistance: Assessments up to 5.5% on willing medical providers, which may include hospitals, CABHAs, CAP MR providers and others (rates are increased to offset the assessment) ($60 mil reduction); Targeted rate adjustments where NC rates are disproportionate to regional rates or where analysis indicates a rate adjustment is necessary (examples used are payment differential for RN/LPNs providing private duty nursing) ($8.4 mil reduction); Health homes for individuals with chronic conditions, including mental health conditions (90% federal match for 8 calendar quarters ($16 mil reduction); fraud, waste, abuse, overuse savings, "improving program integrity" ($16 mil reduction); modifying drug pricing and prescription coverage ($3.6 mil reduction); modifying optional and mandatory services to save $16 mil in first year and $25 mil in second - flexibly managed by secretary, adjustments based on best practice, clinical appropriateness, comparison to other medicaid programs and private health insurance (study coming in April will show comparison of medicaid program to other states - benefits and rates); Medical Home - Pregnancy initiative ($528,960 reduction); no increase necessary in 2011-12 for Medicaid rebase because program is under-budget
• NC Health Choice: Targeted rate adjustment ($225,000), strengthening Program Integrity ($500,000 reduction); Modify services on same ground as in Medicaid program ($650,000); align Health Choice and Medicaid services ($125,000 reduction), care coordination ($4.3 mil reduction); a $3.2 mil "adjustment" for rates, actual enrollment.
• Division of Services for the Blind: Reduce Medical Eye Care program ($190,961)
• Division of MH/DD/SAS: Eliminate Child and Family Support Team pilot that provides a dedicated contact for low wealth schools to the local mental health system ($523,638 reduction); Reduce LME administration funds by 5% ($3.3 mil); Earmark $75 mil from the Mental Health Trust Fund to increase community based services, such as local in-patient beds and housing, support integrated electronic health records, and promote integration of physical and mental health.
• Division of Vocational Rehabilitation: Eliminate Recreational Therapist Services ($284,501 reduction and eliminates 5 positions); Reduce financial eligibility criterion for receiving Independent Living services from 125% to 100% of the Federal Poverty Level ($1.8 mil reduction); Reduces Basic Support program by $2 mil, says the availability of unspent federal funds will mitigate the impact on service delivery

Public Education:

• Residential Deaf/Blind Schools: The transfer includes 543 staff positions to DPI, a 5% reduction recommended (22 positions)
• EC Headcount adjusted annually to reflect actual headcount - $7 mil reduction
• 3 things to become local responsibility - school bus replacement, tort claims and workers comp, reduction in non-instructional support
• Transportation - 10% reduction (40 mil)
• $40 mil reduction in textbook funding - 34.6% reduction
• Central Office 10% reduction, instructional support reduced by 5%, school building administration funds reduced by 7.5%, noninstructional support reduced 15% and 10% reduction at DPI
• Retirement incentives for LEAs and DPI
• 5% reduction to More at Four
• Funds increase in instructional costs associated with enrollment growth

Universities  

• 8% reduction, netting tuition out about 6% reduction
• Reducing the UNC Hospital subsidy - eliminates 25% of the subsidy for charity care, noting an operating income of $56.7 mil and $98.2 mil overall net income
• Provides funding for instructional support for 2300 increased enrollment and operation and maintenance costs for new buildings

Community Colleges

• Funds 9700 student enrollment growth
• Restructuring of existing formulas recommended, tuition increase
• 8 specialized centers and programs eliminated

General Government

• Consolidating Department of Administration, Office of State Personnel, Office of the State Controller, and Office of Information Technology Services to a Department of Management and Administration
• Of note in the Department of Administration: Eliminate Youth Advocacy Referral functions (and 3 staff), says the information and referral functions will be distributed among constituent services staff; another "middle management" position is eliminated from the Youth Advocacy and Involvement Office

Justice and Public Safety

• Recommends consolidation of Juvenile Justice, Corrections and Crime Control and Public safety into a new Department of Public Safety, eliminating 60 positions
• Department of Corrections: 4% decrease year 1, 3% decrease DOC: Reduce funding for Summit House, Wome at Risk, Harriet's House by 10%; reduce operating reserves for the new health facilities; reduce inmate costs through polciy changes to  for sentence reduction credits and to create 2 release dates per month ($3 mil); potential savings from the Justice Reinvestment Act recommendations of $12.4 mil in the first year and $27 mil in the second year;seek Mecdicaid reimbursement for qualifying inmate medical expenditures ($3 mil reduction);
• Daprtament of Juvenmile Justice and Delinquency Prevention 7% reduction in year one, 8% in year 2: Eliminate 4 admin positions ($272,927); Eliminate Camp Woodson ($970,000); Reduce Direct Care contracts, inclduing Eckerd Wilderness Camp and closing one  multi-purpose home operated by Methosit Home for Children; reduce Juvenile Crime Prevention Council and Project Challenge funding ($2.2 mil); close Swannanoa Youth Development Center ($1.4 mil reduction)
• Judicial Branch: 9% reduction to non-constitutionally mandated court programs, including family and drug treatment courts, dispute resolution, mediation and arbitration programs, and conference of DAs and Clerks Conference; IDS held harmless, facing a shortfall this year
• Department of Justice: Eliminates NC LEAF state appropriations for a reduction of $356,250