NC Senate Budget Sets Up Clash With House Over Medicaid

Jun 16, 2015

North Carolina Senate Republicans unveiled a spending plan Monday that sets up a confrontation with Republicans in the House of Representatives over the polarizing Medicaid overhaul both chambers have sought since last year.

The proposal, which calls for spending $21.5 billion next year, would create a new state agency to oversee the state’s Medicaid program, allowing for-profit managed care entities to administer the amount of money spent on each patient’s care. House Republicans proposed last week modifying the program by keeping it within the Department of Health and Human Services and allowing non-profit companies run mostly by hospitals to manage each patient.
 

Sen. Harry Brown (center), a Republican from Onslow County, presented the Senate's budget proposal. Foreground: Sens. Ralph Hise, Kathy Harrington, and Bill Rabon and Senate Leader Phil Berger
Credit Jorge Valencia

"It is a pressing issue for the state because if we're going to fund education and all the other services that are required in the state, we need to have budget predictability," said Sen. Tommy Tucker, a Republican from Union County.

The Senate’s proposal would create the Health Benefits Authority, which would be run by a board appointed by Senate Leader Phil Berger, House Speaker Tim Moore and Gov. Pat McCrory. The board would appoint a CEO, and authority employees would not be subject to the state personnel law, so there would be no limit to their salaries.

The Medicaid debate, which ended in a stalemate at the end of the legislative session in the summer of 2014, sets the stage for what could be weeks of negotiations between the Republican-led Senate and House over the budget.

But it’s not the only difference: Sen. Harry Brown, co-chairman of the Senate Appropriations Committee, presented on Monday a plan that would that would increase spending by 2 percent, in contrast with the plan the House approved last month increasing spending by 5 percent.

“The Senate’s proposing a balanced budget that protects the state’s long-term fiscal health, smartly invests in public education, cuts taxes and supports job growth and economic development statewide,” Brown said.

Highlights:

Schools. The proposal would increase starting teacher pay to $35,000, up from $33,000, and would overall increase spending on teacher pay by an average of 4 percent. It would add $270 million for more primary-grade teachers to lower kindergarten classes to 17 students and first- through third-grade classes to 15. It increases school vouchers funding by $7 million. It requires schools with grades D or F to implement a turn-around plan.

Taxes. The budget includes tax and economic plans Senate leaders have rolled out, lowering the personal income tax rate to 5.5 percent, cutting taxes on small businesses, and creating new taxes on services such as advertising and veterinary care.

Environment. Moves oversight of state parks, aquariums and the Museum of Natural Sciences from the Department of Environment and Natural Resources to the Department of Cultural Resources.

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