Politics & Government
5:27 pm
Thu June 26, 2014

State Lawmakers Clash Over Medicaid Projections

NC Senate committee
Credit Jessica Jones

Governor McCrory and leaders in the state House are trying to speed up budget negotiations, but without much success so far. They’ve introduced a bill that’s a kind of mini-budget to give teachers 5 percent raises in case House and Senate leaders can’t agree on a comprehensive spending plan. But the biggest sticking point in the negotiations is over Medicaid. Thursday morning, State Budget Director Art Pope appeared before a Senate Finance Committee to answer senators’ questions.

When it comes to Medicaid, the philosophical divide between members of the House and the Senate is very wide. Generally speaking, the Senate wants to allocate more money for the health care program for low-income people, while the House- and the governor- want to set aside less. As he stood before members of the Senate Finance Committee this morning, State Budget Director Art Pope said setting aside more money to plan for possible overruns is a mistake.

"The cost in the Senate budget is firing teacher assistants. Some 6 to 7000 current teacher assistants, who serve over 239 thousand children in classrooms, would be fired. You unnecessarily fire them. You can’t go back and rehire them put them back in the classroom next spring and find out oh we overfunded Medicaid," said Pope.

The Senate’s budget proposal would fire teacher assistants in the second and third grades to help pay for teacher raises. Pope’s appeal to senators was unusually warm and fuzzy for the normally hard-nosed budget director. Senate budget writers, including Republican Senator Jerry Tillman, told Pope the state needs to allocate between 2 to 3 hundred million dollars more for the state’s share of Medicaid costs:

"I just wonder if you can be comfortable with taking numbers that are the least worst scenario versus the more conservative view that we’re taking the gap’s too wide and what I want to know Mr. Pope with all of these unknowns why would we gamble on a 2 or 300 million dollar deficit coming into an election year."

The next two-year budget cycle will come before the 2016 elections, when Governor McCrory and lawmakers are up for re-election. But few lawmakers can recall a year in which they didn’t have to contend with Medicaid overruns. Art Pope told legislators today that the upcoming shortfall won’t be as dire as in the past. He says the General Assembly’s fiscal research division hasn’t taken into account several factors in estimating the number. Those factors include money coming in from enrollment and claims backlogs and hospital payments, which are all rolling targets. But Pope’s talk didn’t impress Senate President Phil Berger.

"In essence, what he is saying is, it really doesn’t matter what number we put down, we can go ahead and go forward this year, and we’ll just deal with that number down the road and that’s not the way we ought to be doing a budget," said Berger.

Berger says he’s hopeful that he and other legislative leaders can sit down with the governor and come to an agreement on Medicaid estimates, but he says it will take time: 

"I’ve said all along that that’s the first thing that needs to be done for us to start moving towards a budget deal."

But on the House side, lawmakers are hoping that passing a forty page scaled back spending plan that will give teachers five percent raises and state employees thousand dollar increases will help ease the budget deadlock. Democratic House Minority Leader Larry Hall is from Durham.

"The one thing it does it give some emphasis and some incremental progress toward finding a real solution and a real way to pay for these teacher and state employee raises," said Hall.

And when the time came to vote, both Republicans and Democrats in the House came together in a rare show of unity. They voted unanimously to pass the measure. So far, no more conference committees to discuss a final budget have been scheduled. It’s not clear when the next one will be.