Today is the first day of the new fiscal year, but there’s no state budget adjustment in sight. That’s because legislators can’t agree on two big issues: Medicaid funding and teacher raises. Last week, the House passed a partial spending plan that would’ve given teachers average raises of five percent despite the absence of a larger budget deal, but last night the Senate rejected the measure.
The Council of State, which is comprised of the leaders of North Carolina’s state agencies and led by the governor, met this morning for its usual monthly meeting. Afterwards, Governor Pat McCrory spoke with reporters.
"I’m very disappointed that the Senate is not taking action on a House bill which was voted on unanimously by Republicans and Democrats, which gave teachers a good pay raise, which did not cut Medicaid services to the poor and disabled, and Alzheimer’s patients, and which does not impact teacher’s assistants," said McCrory.
Last night, the Senate refused to hear the bill and returned the measure to the House. It didn’t really address Medicaid, but the Senate’s budget, put forth a few weeks ago, would cut Medicaid services for some low-income people. It would also eliminate teacher assistant positions in the second and third grades. Senate budget writers also want to set aside more money for Medicaid cost overruns- the General Assembly’s Fiscal Research Division has said the shortfall is between 200 and 300 million dollars. But McCrory says that estimate isn’t accurate:
"I think the hearings last week on the budget really verified many of the numbers that we have been presenting and I think some of the numbers that are now being correcting are the numbers that the Senate initially presented and those numbers are being corrected as we speak."
Last week, State Budget Director Art Pope told the Senate Finance Committee that Fiscal Research’s estimate didn’t take into account a claims and enrollment backlog and growth in Medicaid spending. He said the shortfall estimate should be lower. But it’s not clear whether a smaller number will convince Senate budget writers to spend more time at the negotiating table. Republican Phil Berger is the President Pro Tem of the Senate.
"The issue on the budget at this point is the Medicaid spend number. We don’t have any agreement on that. We have received from the House some information that we’re in the process of analyzing," said Berger.
Meanwhile, Governor Pat McCrory’s office has asked teachers to call Senators to get them to pass Senate Bill 3, the mini-budget that would give teachers five percent raises immediately. There is some support in the Senate to consider that bill again. But after the Senate floor session this afternoon, Senator Tom Apodaca, an appropriations chair, said it’s not going to happen.
"We in the Senate decide what we’re going to hear or not hear," said Apodaca, "and I think we’ve got that under control."
Apodaca and other Senators have said that they sent the bill back to the House yesterday because it’s not fiscally balanced. When asked what he’d do if the bill landed back on his desk again, Apodaca didn’t mince words:
"I just might put it in the trash can, I don’t know. We’re not going to do anything with that bill. I appreciate it. It may lay in limbo. Let’s get a budget done- a real budget."
With no agreement in sight yet, state agencies are going to have to tighten their belts. There is a two-year budget in place. But the governor will start making cuts to state agencies based on both houses’ budget adjustment proposals. And the longer lawmakers take, the more it costs the state. It’s estimated it costs North Carolina fifty thousand dollars a day for lawmakers to stay in session after the first of July.